Preparing for DAC8: Understanding the EU's Directive on Administrative Cooperation in the Field of Taxation

As the Web3 ecosystem matures, regulatory frameworks are rapidly evolving to ensure fair taxation, transparency, and cross-border cooperation. One of the most significant developments impacting digital asset businesses in the European Union is DAC8, the latest amendment to the Directive on Administrative Cooperation (DAC).

Whether you're a crypto exchange, NFT platform, wallet provider, or DeFi protocol with EU users, understanding and preparing for DAC8 is essential to stay compliant and avoid penalties.

In this article, we break down what DAC8 is, who it applies to, when it takes effect, and what steps you should take now.

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What Is DAC8?

DAC8 is the eighth version of the EU’s Directive on Administrative Cooperation, aimed at strengthening tax transparency in the digital asset sector. Building on earlier directives that targeted traditional financial institutions, DAC8 brings crypto-asset service providers (CASPs) into the scope of mandatory reporting obligations.

Key Objectives:

• Ensure tax authorities in EU member states have access to information about crypto transactions.
• Fight tax evasion and avoidance in digital asset markets.
• Standardize reporting requirements for crypto businesses across the EU.
  
  

Who Does DAC8 Apply To?

DAC8 targets a broad range of entities that interact with digital assets:

Crypto-Asset Service Providers (CASPs)

If you operate a business that facilitates the exchange, custody, transfer, or issuance of crypto assets, DAC8 likely applies to you.

DeFi Platforms & DAOs

Even if your platform is decentralized, if there’s a centralized component or operator with control or facilitation, it may fall within scope.

NFT Marketplaces

Platforms facilitating NFT trades may also be subject to DAC8, depending on how transactions are structured and whether they fall under the definition of "crypto-assets."

Non-EU Businesses

Even if you're not based in the EU, DAC8 may apply if you have EU-based users or customers. This extra-territorial reach echoes frameworks like MiCA and the GDPR.

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What Does DAC8 Require?

The directive requires CASPs to:

Collect Tax-Relevant Information

• Customer identities (KYC/KYB)
• Transaction amounts
• Asset types
• Wallet addresses (where relevant)

Report to Tax Authorities

Annual submission of transaction data, categorized by user residency, to enable cross-border tax cooperation between EU member states.

Ensure Accuracy and Completeness

You must establish systems to verify and validate the data you collect and report, aligning with your AML/KYC processes.

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When Does DAC8 Come Into Effect?

DAC8 was formally adopted in October 2023 and will apply starting January 1, 2026.
However, data collection obligations begin in 2025, so businesses need to start adapting their compliance programs now.

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How to Prepare for DAC8

1. Map Your User Base

Understand where your users are located and whether any fall under EU jurisdiction. This determines your reporting scope.

2. Upgrade Your KYC/KYB Flows

Ensure your identity verification systems capture the right level of detail for tax reporting (national ID numbers, tax residency, etc).

3. Implement Transaction Monitoring

Track and categorize crypto transactions with metadata relevant for tax purposes. This includes timestamps, wallet addresses, asset types, and amounts.

4. Use a Unified Compliance Platform

Tools like ComPilot help teams unify KYC, KYB, AML, and transaction data, making it easier to comply with directives like DAC8 through automated workflows and contextual reporting.

5. Train Your Teams

Compliance officers, legal counsel, and product teams should all be briefed on DAC8’s implications. Cross-functional alignment is key.

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Why DAC8 Matters for Web3

The introduction of DAC8 signals a new regulatory era for Web3, one where tax compliance is as central as financial crime prevention.

For crypto-native companies, DAC8 presents a chance to build trust with users and regulators. For traditional financial institutions entering the space, it provides regulatory clarity and levels the playing field.

By preparing early and embracing smart compliance tools, businesses can avoid last-minute scrambles and position themselves as trusted players in the evolving crypto economy.

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Conclusion

DAC8 is not just a tax directive, it's part of the EU’s broader effort to bring digital assets into the regulated financial ecosystem. For compliance professionals and crypto founders alike, the time to prepare is now.

At ComPilot, we’re helping Web3 businesses build scalable, audit-ready compliance programs with tools that integrate KYC, KYB, transaction monitoring, so you’re ready for DAC8, MiCA, and whatever comes next.

Want to learn how ComPilot can help you get ready for DAC8? Book a demo with the team.

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