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DAC8: Overview & commentary

Florian Wimmer (CEO, Blockpit AG)

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What is DAC8?

DAC8 is the eight amendment of the “Directive on Administrative Cooperation” and aims to better regulate the tax aspects of crypto assets within the EU. A main objective of DAC8 is to create uniform tax transparency between Member States through coherent disclosure obligations for providers and issuers of crypto assets and e-money.

Who is affected?

All organizations that service customers in the EU by processing crypto transactions, such as crypto exchanges, broker intermediaries and crypto ATMs. Also non-EU based organizations that operate in Europe, might be affected by the DAC8 directive. Please check our FAQ section for a detailed legal definition.

What do companies need to do?

As a first step, you need to carry out an assessment to determine whether your business qualifies as a Crypto Asset Service Provider and falls under the scope of DAC8. The next step is to identify your obligations under the new legislation, and the impact on your day-to-day operations.

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Who qualifies as a Crypto-Asset Service Provider (CASP)?

Any natural person, legal entity or undertaking (i) whose occupation or business is the provision of one or more crypto asset services to third parties on a professional basis, (ii) that has been authorised within the EU, and (iii) has a registered office in a Member State where they carry out at least part of their crypto-assets services.Such ‘crypto-asset services’ include:(a) the custody and administration of crypto-assets on behalf of third parties;(b) the operation of a trading platform for crypto-assets;(c) the exchange of crypto-assets for funds;(d) the exchange of crypto-assets for other crypto-assets;(e) the execution of orders for crypto-assets on behalf of third parties;(f) placing of crypto-assets;(g) the reception and transmission of orders for crypto-assets on behalf of third parties(h) providing advice or portfolio management in crypto assets;(j) providing transfer services for crypto-assets on behalf of third partiesFor clarity, CASPs that provide crypto-asset services on a cross-border basis are not required to have a physical presence in the territory of every host Member State.

What is the difference between a Crypto-Asset Service Provider (CASP) and a Virtual Asset Service Provider (VASP)?

The term Virtual Asset Service Provider (VASP) is defined by the Financial Action Task Force (FATF) which is an independent inter-governmental body within the OECD that develops and promotes policies to protect the global financial system against money laundering and corruption. The EU is a member of the FATF and implements its regulations.On the other hand, the term Crypto Asset Service Provider (CASP) is defined in the Markets in Crypto-Assets Regulation (MiCA) and is similar but broader in scope than the definition of a VASP to ensure it covers more use cases of crypto asset services. Providers of crypto-assets in the EU will be subject to the definition of CASPs.

How do MiCA and DAC8 differ?

While MiCA constitutes the legal framework for the regulation of crypto-assets and as a Regulation is directly applicable in the EU member states, DAC8 is primarily intended to regulate the exchange of tax-relevant information between CASPs and national tax authorities and, as a Directive, requires implementation through national laws in each member state.

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DAC8: Overview & commentary

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