On October 17, 2023, the European Union Council approved a crucial revision to the Directive on Administrative Cooperation (DAC) with the goal of simplifying tax reporting for cryptocurrency transactions.
This latest update, referred to as “DAC8,” marks the eighth revision, with each previous directive addressing distinct aspects of financial oversight.
DAC8’s primary objective is to ensure proper taxation of cryptocurrency transactions and serves as an enhancement to the existing legal framework. It empowers tax authorities to monitor and investigate cryptocurrency transactions that involve individuals or entities in one EU jurisdiction sending funds to recipients in another EU country.
These regulations encompass all Bitcoin transactions within the EU and are in alignment with MiCA (Markets in Crypto-Assets) regulations and the Crypto-Asset Reporting Framework (CARF).
The European Parliament provided strong support for this directive, with 535 members voting in favor and only 57 opposing it during the September vote. The regulation will come into immediate effect once it is published in the European Union’s Official Journal.
Meanwhile, the United States is intensifying its efforts to ensure proper taxation of cryptocurrency holdings. In a significant move, seven senators contacted the Treasury Department and the Internal Revenue Service (IRS) on October 11 with a request to hasten the development of clear guidelines for reporting and paying taxes on cryptocurrency gains.
The senators praised the current proposal for the regulations but noted that its implementation by 2026 is too slow.
However, it’s important to note that while the EU is taking proactive steps in cryptocurrency tax regulation, European cryptocurrency investors may have to wait until at least mid-2026 to benefit from comprehensive protections provided by EU’s landmark crypto regulations, Markets in Crypto-Assets (MiCA) bill, which was passed in April 2023.
The European Securities and Markets Authority (ESMA) has recently released a report indicating that regulators may have limited oversight powers until local laws fully integrate new rules. ESMA also warns crypto investors to exercise caution, as they could still be at risk of losing all their invested funds even after the implementation of MiCA in 2024.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
