- DAC8 will extend the directive’s requirements to the entire digital asset sector
- Service providers within the Eurozone will be required to track transactor data
- This is how the EU intends to combat illegal activities and tax defaulters
The EU Council unanimously approved the MiCA rulebook on Tuesday, May 16.
However, the eighth amendment to the Administrative Cooperation Directive (DAC8) was approved. What is this and why do cryptocurrency traders need to pay attention to it?
The administrative cooperation directive suggests that government agencies and large financial players should exchange information within the jurisdiction.
In particular, these are names, surnames, and contact information for participants in large transactions.
The Eighth Amendment to the DAC is closely related to MiCA. It actually extends the requirement to exchange information to find defaulters to the entire digital asset market.
Let’s look at an example. In Portugal, cryptocurrency taxation is quite lenient. In Italy, for example, the trader will have to pay more.
He can hide part of his income by creating an account in Portugal as well, while being a resident of Italy himself.
DAC8 aims to curb this practice. When the amendment is adopted, the service provider in the same Portugal will be required to transmit information to the Italian tax authorities.
Also the amendment introduces new reporting rules for individuals with high income, more stringent requirements for counterparties and applies, tentatively, to all transactions.
Although the text previously only included transactions of $3,000 or more.
“Today’s (May 16) decision is terrible news for those who use cryptoassets for illegal activities to circumvent EU sanctions restrictions or to fund terrorism.
You can’t do that in Europe anymore” – Elisabeth Svantesson, head of the Swedish Ministry of Finance.