According to CoinDesk, the European Union's finance ministers have formally adopted new rules allowing tax authorities to share data on individuals' crypto holdings. The document will be published in the EU's Official Journal and will enter into force 20 days later. These rules were proposed last year to prevent assets from being stashed overseas using cryptocurrencies and received unanimous support from EU member states, despite discussions mostly taking place behind closed doors.
In May, a draft bill obtained by CoinDesk revealed that the rules extend an existing law to cover a wide range of digital assets, including stablecoins, non-fungible tokens (NFTs), decentralized finance (DeFi) tokens, and proceeds from crypto staking. The law, known as the Eighth Directive on Administrative Cooperation (DAC8), requires crypto companies to report information on customers' holdings, which will automatically be shared between tax authorities. The European Commission stated on Tuesday that DAC8's crypto provisions complement the recently finalized landmark Markets in Crypto Assets Regulation (MiCA) and anti-money laundering rules under the Transfer of Funds Regulation (TFR).
The directive aims to improve Member States' ability to detect and combat tax fraud, avoidance, and evasion by requiring all EU-based crypto-asset service providers, regardless of their size, to report transactions from customers residing in the EU. The scope of the rules has also been expanded to apply to financial institutions with respect to electronic money and central bank digital currencies (CBDC).