Cryptocurrencies are at the heart of the new action plan promoted by the European Commission to update the Directive on Administrative Cooperation (DAC) with the aim of expanding its scope and strengthening the framework for administrative cooperation.
This initiative called “DAC 8” is aimed at improving cooperation between national tax authorities in order to ensure adequate taxation of income and revenues relating to new means of payment and investment, and in particular crypto-assets and electronic money.
In this context, the Commission has decided to launch a public consultation, which will end on June 2, 2021, with the aim of gathering stakeholders’ views on two main aspects:
- crypto-assets, e-money and the provision of services by intermediaries;
- the strengthening of the EU framework on administrative cooperation, in particular on compliance measures relating to the reporting requirements arising from EU rules.
The information gathered should enable the definition of reporting requirements that ensure fair taxation for those involved while avoiding excessive administrative burdens and at the same time ensure a level playing field and common regulation for EU countries also with respect to cryptocurrencies.
This initiative is expected to provide new information to the 27 EU member states to enable the exchange of data in order to ascertain the correct taxation of income and revenues related to new means of payment and investment, in particular crypto-assets and electronic money.
In order to encourage a more synergic and coordinated approach to controls, the institutions are also considering how the data collected can also be used to assess the correct application of VAT regulations. Finally, fines and any other compliance measures will be considered to ensure effective reporting and prevent distortions generated by differences between member states’ compliance frameworks.