According to a draft bill obtained through freedom of information laws, the European Union (EU) is preparing to introduce new tax regulations that will mandate cryptocurrency companies to disclose their clients’ holdings to tax authorities.
The proposed data-sharing law, based on a model from the Organization for Economic Cooperation and Development (OECD), is expected to be approved by finance ministers in the coming week, enabling tax authorities within the 27-nation bloc to exchange information. While the bill received unanimous support during a recent meeting, formal approval from parliaments is still pending in some cases.
The draft bill, dated May 5, closely aligns with the proposals put forward by the European Commission in December 2022. Its aim is to prevent EU residents from storing cryptocurrencies abroad to evade taxation. The commission intends to establish a register of crypto asset operators by December 2025, a year earlier than previously planned, with the rules taking effect from January 1, 2026.
Notably, the law, known as the eighth directive on administrative cooperation (DAC8), includes provisions for platforms facilitating the trading of non-fungible tokens (NFTs) that can be used for payments or investments, as well as for non-EU providers serving EU clients. Foreign cryptocurrency firms will be able to report to foreign authorities that meet EU standards.
The proposed regulations reflect the EU’s efforts to enhance tax transparency in the cryptocurrency sector, addressing concerns related to tax evasion and ensuring a level playing field for all market participants.
