Following the crises in major companies in the cryptocurrency market such as Terra and FTX, the regulatory institutions of especially developed countries have targeted the crypto sector. The main reasons for this are the financial losses experienced by the citizens of these countries and their inability to exercise their legal rights. In the European Union, institutions continue their work on this sector.
What Does DAC8 Regulation Include?
The eighth iteration of the Administrative Cooperation Directive (DAC8), which is the tax reporting rule for cryptocurrencies in the European Union, has been adopted by the European Union Council. With this development that took place on October 17, the regulation will come into effect after being published in the Official Journal of the European Union.
The Administrative Cooperation Directive was approved in May 2023 following the implementation of the Markets in Crypto-Assets Regulation (MiCA). The reason for adding the number eight to the name of the revised program indicates that the eighth version is being implemented in this regulation. Officials have dealt with different aspects of financial supervision in each previous directive.
DAC8 aims to give tax collectors the authority to monitor and evaluate every cryptocurrency transaction carried out by individuals or organizations from any member state of the European Union.
With the new draft, DAC8 is compatible with the Crypto Asset Reporting Framework (CARF) and the regulations specified in MiCA. It effectively covers all cryptocurrency transactions in the European Union region. DAC8 received significant support in the European Parliament with 535 votes in favor and only 57 votes against in the voting held in September.
All Eyes on the US After the European Union
Regulatory institutions in the United States are also making intense efforts to implement tax law procedures in the crypto sector as soon as possible. On October 11, seven members of the US Senate, officials from the Treasury Department, and officials from the Internal Revenue Service called for the expedited advancement of a rule that would introduce specific tax reporting requirements in the crypto market.
In particular, Senate members criticized the nearly two-year delay in the implementation of cryptocurrency tax reporting requirements planned for 2026 for transactions to be carried out in 2025.
