The advent of crypto-assets has brought new complexity and ambiguity to cross-border transactions. In an effort to close this information gap and combat tax evasion and avoidance, the European Union has adopted the Eighth Directive on Administrative Cooperation (DAC8), which significantly expands the EU’s tax transparency framework. While crypto-assets headline this development, DAC8’s implications stretch far beyond just crypto. It becomes effective from 1 January 2026.
For tax advisers, accountants and legal professionals, DAC8 is more than a technical update. It introduces substantial compliance burdens and due diligence expectations that will redefine how advisory and legal services engage with digital finance. Here’s what you need to know.
What is DAC8?
DAC8, formally adopted on 17 October 2023, is the latest amendment to the EU Directive on Administrative Cooperation (Directive 2011/16/EU). It enters into force on 13 November 2023, with key provisions becoming effective from 1 January 2026, following transposition into national law by 31 December 2025.
While rooted in closing crypto-related tax gaps, DAC8 also enhances existing reporting regimes and deepens cooperation among EU tax authorities. The directive is heavily informed by the OECD’s Crypto-Asset Reporting Framework (CARF) and updates to the Common Reporting Standard (CRS).
Key elements of DAC8
Crypto-Asset Reporting Framework (CARF) alignment
DAC8 introduces a mandatory reporting regime for Reporting Crypto-Asset Service Providers (RCASPs). Whether regulated or not, RCASPs must report detailed information about users and transactions involving reportable crypto-assets.
Who must report?
✅ Both regulated service providers (under MiCA) and unregulated operators
✅ Firms with EU-based customers (residency-based test, not entity-based)
What must be reported?
✅ All exchanges between crypto and fiat currencies
✅ Transactions between crypto-assets
✅ Transfers of crypto-assets
✅ Crypto transactions for goods/services above USD 50,000
Due diligence obligations:
RCASPs must apply KYC-like processes and retain information. If a client fails to respond to information requests (after two reminders), the provider must block further transactions.
Implications for tax advisers and accountants
DAC8 represents a significant shift for professionals engaged in tax planning or crypto investment advisory:
New compliance layers: Advisers helping clients invest in or structure around crypto must understand DAC8 disclosures and adapt onboarding processes.
Advisory exposure: Professionals must assess client exposure to DAC8 reporting to avoid non-compliance liability.
Cross-border sensitivity: Any arrangement involving EU residents could trigger DAC8 duties—even for non-EU firms if they serve EU clients.
Legal sector considerations
DAC8 also amends DAC6 in response to CJEU ruling C-694/20, refining the scope of legal professional privilege:
✅ Lawyers are no longer required to notify other intermediaries of their reporting obligations.
✅They must, however, inform their clients where DAC6 obligations exist.
This balances professional secrecy with the need for transparency, reducing lawyers’ administrative exposure while preserving client confidentiality.
Advance cross-border rulings and HNWI scrutiny
Another novel requirement is the automatic exchange of cross-border tax rulings issued to individuals, especially high-net-worth individuals (HNWI):
✅ Applies if the ruling involves transactions over €1.5 million or determines tax residency.
✅ Effective for rulings issued, amended, or renewed after 1 January 2026.
This presents a heightened transparency risk for private client lawyers and advisers who work with mobile individuals with a high net worth.
E-Money and CBDCs under CRS, not DAC8
DAC8 explicitly carves out e-money and central bank digital currencies (CBDCs) from its crypto-asset reporting regime. These are instead integrated into the revised CRS regime. This bifurcation adds complexity for firms offering both crypto and traditional fintech services.
DAC8 is only concerned with crypto-assets that are not already covered by existing financial reporting regimes.
So, e-money (like digital wallets holding fiat currencies) and central bank digital currencies (CBDCs) (like a digital euro or digital pound) are excluded from DAC8. Instead, they fall under the Common Reporting Standard (CRS) which is an existing global framework for automatic tax information exchange.
This separation avoids duplication but creates complexity for firms dealing with both crypto and e-money products.
Example 1: A fintech app offering bitcoin and GBP wallets
Scenario:
A fintech company offers:
- Crypto trading for bitcoin and ethereum
- A GBP e-wallet where users can store money and pay for items
DAC8 applies to:
- All crypto trades and transfers (Bitcoin, Ethereum, etc.)
CRS applies to:
- The GBP e-wallet transactions and balances (because it’s e-money, not crypto)
Implication for the firm:
- They must report crypto transactions under DAC8
- They must separately report GBP wallet activity under CRS
That means two sets of due diligence and reporting obligations, with different formats, timelines, and regulators.
Example 2: A bank offering a digital euro wallet and crypto custody
Scenario:
A traditional bank offers:
- A wallet for the digital euro (a CBDC issued by the ECB)
- Custody services for clients’ crypto-assets
DAC8 applies to:
- The custody and movement of crypto-assets
CRS applies to:
- The digital euro wallet (because it’s a CBDC, not a private crypto asset)
Even though both services are digital, they are regulated separately.
What this means for your firm
If you’re a tax adviser, accountant, or legal professional you’ll need to understand both DAC8 and CRS and know which regime applies to which product. Getting this wrong could mean under-reporting (or over-reporting), both of which come with compliance risks.
TIN reporting overhaul
DAC8 introduces a multi-phase plan to improve Tax Identification Number (TIN) accuracy:
- By 2026: TINs must be reported with all crypto-asset transactions
- By 2028: Expanded to rulings and country-by-country reporting
- By 2030: Includes employment, directors’ fees, pensions
An EU verification tool for TINs is under development to support this.
What should firms do now?
Audit client exposure to crypto-assets
Identify clients including individuals and entities who are transacting in crypto or holding such assets. This includes those using non-EU platforms or wallets.
Adapt due diligence protocols
Ensure onboarding and ongoing monitoring aligns with DAC8 KYC-like obligations. Review internal recordkeeping policies and ensure system compatibility with the XML schema to be released by the Commission.
Train staff and clients
Tax and legal professionals must be briefed on DAC8’s wide-reaching implications—particularly those advising HNWIs or crypto firms.
Watch for national implementation quirks
Although DAC8 is an EU directive, penalties and operational details are left to each Member State. Monitoring domestic legislation will be key.
