European Council approves updated rules for tax reporting on crypto asset transfers
The European Council has approved the latest update to the Directive on Administrative Cooperation (DAC) which now extends tax reporting requirements to include transfers of crypto assets. It is the eighth version of DAC, which is a set of procedures for automatic information sharing between European governments for tax purposes. DAC8 adheres to the Crypto-Asset Reporting Framework (CARF) and the Organisation for Economic Cooperation and Development’s (OECD) reporting standards published in October 2022. The European Union’s Anti-Money Laundering and Countering Terrorism Financing rules will now include requirements for crypto asset service providers (CASPs) to collect and report information on crypto asset transfers of any amount. It also proposes the creation of a new European AML body. CASPs are mandated to ensure that transfers of crypto assets are accompanied by the beneficiary’s name, distributed ledger address, and account number where appropriate.
Swedish Finance Minister, Elisabeth Svantesson, in a statement, said today’s decision is bad news for those who have misused crypto assets for illegal activities, to circumvent EU sanctions or to finance terrorism and war, as doing so will no longer be possible in Europe without exposure. Changes to DAC are not made through legislation but through a consultation process among the member states of the European Council.