EU’s DAC8 Crypto Tax Law Now in Force: What It Means for Your Digital Assets

Europe just flipped the switch on crypto's biggest transparency overhaul. The DAC8 tax reporting mandate is live—and it's watching every transaction.

Your wallet is now an open book.

No More Shadow Trading

Every EU crypto service provider must now report user holdings and transactions directly to tax authorities. Cross-border? Doesn't matter. The net catches exchanges, wallet providers, even some DeFi platforms. Think of it as a financial panopticon—built on blockchain's own immutable ledger.

The Global Ripple Effect

This isn't just an EU problem. DAC8 sets a global precedent. Non-compliant platforms face exclusion from the EU market. Expect other jurisdictions to copy-paste this framework. The age of regulatory arbitrage is gasping its last breaths.

For the Retail Trader

Your tax reporting just got automated—whether you wanted it or not. Capital gains, staking rewards, airdrops—all logged and matched against your identity. The convenience comes with a cost: total fiscal visibility. A cynic might say it's the most efficient thing finance has produced since the overdraft fee.

The Compliance Burden

Platforms are scrambling. KYC procedures are tightening. Some may restrict services or geofence entirely. Innovation now dances to a regulator's tune. The wild west era? Officially sunset.

Navigating the New Landscape

Adapt or get penalized. Use compliant platforms. Keep immaculate records. Understand your local tax liabilities. This isn't a crackdown—it's an institutionalization. Crypto just got its passport stamped by the traditional system.

The message is clear: play by the old world's rules, or don't play at all.

How does DAC8 affect crypto users?

Antonia Eilander, a corporate and tax lawyer with Netherlands-based crypto law firm O2K, said DAC8 “significantly increases tax transparency”, to use the EU’s phrasing, for cryptocurrency users in the 27-member bloc.

Every exchange and service provider is now legally required to identify its users by name, address and tax identification number. Together with your full transaction history, firms must report this information every year to tax authorities, who then exchange the data among themselves in the EU.

“For users, this means that crypto activity is far more likely to be matched against tax returns, even where no fiat cash-out occurs,” Eilander said.

It also means an end to anonymous transactions, according to Yulia Privalova, a lawyer at crypto exchange and depository Asterium.

“Crypto activity on centralized exchanges is now treated in a similar way to traditional banking activity,” Privalova told Cryptonews, adding:

“Users should therefore assume that transactions on regulated platforms are no longer outside the view of regulators … DAC8 makes [it] clear that anonymity on regulated platforms is gradually disappearing.”

She said DAC8 does not require users to take any new actions. Neither does it introduce additional reporting obligations for individuals nor impose taxes automatically. But it “reduces the likelihood that crypto transactions will go unnoticed.”

What will authorities be able to see, and how is this different from before?

DAC8 operates in parallel with the EU’s Markets in Crypto-Assets (MiCA) law, which was passed in April 2023 to regulate how crypto companies get their licenses, protect users and function across the economic bloc.

Both Eilander and Privalova said, under DAC8, tax authorities will receive clearly defined data, including:

• User identification data: as already mentioned, name, address etc., and for individuals, date and place of birth
• Entity data, including information on controlling persons
• The cryptocurrencies people have used in a year
• Purchases of crypto assets with fiat
• Sales of crypto assets for fiat
• Exchanges of one digital asset for another
• Crypto payments for goods and services

The data includes volumes, dates, and types of transactions, Privalova said. But she was quick to point out that, “This is not real-time monitoring but annual reporting provided automatically by platforms.”

Eilander said the EU’s new requirements go beyond earlier reporting models that mainly focused on fiat on- and off-ramps. Although DAC8 covers crypto-to-crypto transactions and transfers “in a standardized, EU-wide format,” the O2K lawyer found “tax residence tricky.”

“Many crypto holders assume it simply follows the jurisdiction of their passport, which is incorrect,” she told Cryptonews. “Under DAC8, reporting is based on tax residence as defined by domestic tax law, not nationality.”

“If tax residence is incorrectly determined, the same crypto activity may be reported to multiple jurisdictions, creating a real risk of double taxation. Having your tax residence properly assessed and documented by a tax professional is therefore essential.”

If crypto is moved from an exchange to a personal wallet like Ledger or MetaMask, is that reported?

“Yes,” Eilander said. “A transfer from an exchange to a private (unhosted) wallet is reportable as a transfer. The report is attached to the user’s identity and tax profile already held by the reporting provider.”

But it’s not the wallet owner’s identity that’s reported, she says, “only aggregated information on the value and number of units transferred to wallets not known to be associated with another regulated provider.”

Put simply, “self-custody remains legal and possible,” Privalova added.

There’s, however, what Eilander calls “paranoia and fear” around bitcoin addresses starting with bc1q or bc1p, stems that respectively represent the modern SegWit and Taproot formats.

“While these formats are commonly used by self-custody wallets, they are also widely used by exchanges and custodial services, meaning address format alone does not indicate whether a wallet is hosted or unhosted.”

Does DAC8 create new taxes for crypto users?

“No,” Privalova stated. “DAC8 does not introduce new tax obligations. Users are not required to pay a special ‘crypto tax’ or submit additional tax forms solely because of this directive.”

However, by giving tax authorities reliable third-party data, it makes non-reporting and under-reporting easier to detect, the lawyers said.

How does DAC8 affect users who trade crypto-to-crypto or use DeFi?

“Crypto-to-crypto trades are explicitly within scope and are reported in aggregated form, with values expressed in fiat terms,” Eilander said.

“For DeFi, the key question is whether there is a business or platform operator that exercises control or sufficient influence to carry out due diligence and reporting. Pure DeFi may be treated differently, but this is a narrow and evolving area, not a pure exclusion.”

What should you do now?

You should assume that activity on exchanges and platforms will be visible to tax authorities. Everything you do in 2026 could be detected. Eilander laid out a series of practical steps one could take:

• Keeping clear records aligned with reported categories (trades, transfers, staking, etc.)
• Understanding how transfers to private wallets are reported
• And ensuring tax filings are consistent with reported crypto activity
• If you have too many transactions, consider using (tax) software.