Europe's DAC8 Law Integrates Crypto Into the Formal Tax System

Source: CryptoNewsNet Original Title: Europe’s DAC8 Law Integrates Crypto Into the Formal Tax System Original Link: DAC8 is a new EU tax rule that started on January 1, 2026. It expands how cryptocurrency activities are reported to tax authorities across the European Union. Its main goal is tax transparency, and for people living in the EU, this is a major turning point.

DAC8 forces automatic tax reporting. Crypto exchanges and brokers must collect identity details, report your Tax Identification Number (TIN), and send full records of your crypto activity to tax authorities. This includes buying or selling crypto for cash, swapping one crypto for another, and even withdrawals to personal wallets if they originate from an exchange.

Self-Custody Remains Legal, but Fund Flows Are Fully Traceable

Self-custody wallets remain legal, but withdrawals from exchanges to personal wallets are now reportable. The EU wants visibility into fund flows without taking control of wallets. Data collection occurs in 2026, with platforms sending first full-year reports to EU tax authorities in 2027. Stronger enforcement comes later when tax authorities compare data across countries.

If users refuse to provide a TIN, platforms can send reminders. After two reminders or 60 days, accounts will be frozen or transactions blocked until compliance. A grace period exists before instant enforcement takes effect.

Anonymous crypto is effectively over in the EU. DAC8 puts crypto into the same reporting systems as banks and applies to non-EU exchanges serving EU users. Non-compliant platforms face bans from the EU market.

The EU estimates DAC8 could generate 1 to 2.4 billion euros annually in extra tax revenue and reduce tax evasion. Concerns exist about reduced privacy for crypto users and higher compliance costs for platforms, though regulators emphasize this is tax visibility, not criminalization.

DAC8 is part of a global shift toward crypto transparency. Governments worldwide are adopting similar models, with crypto transparency becoming the global standard and officially treated like traditional finance.