The EU Digital Asset Tax Transparency Act will take effect in January, requiring crypto service providers to collect and report user transaction information.

PANews December 24 News, according to CoinDesk, the European Union’s latest digital asset tax transparency law will come into effect on January 1. The directive, known as DAC8, extends the EU’s long-standing administrative cooperation framework in taxation to include crypto assets and related service providers. It requires crypto asset service providers, including exchanges and brokers, to collect and report detailed user and transaction information to national tax authorities. Subsequently, these tax authorities will share the data among EU member states. DAC8 operates in parallel with the EU’s Markets in Crypto-Assets (MiCA) regulation but is independent of it. MiCA regulates market conduct, while DAC8 oversees tax flows. The directive takes effect on January 1, but cryptocurrency companies will have a transition period. Service providers must complete full compliance with reporting systems, customer due diligence processes, and internal controls by July 1. Those who fail to report on time will be penalized according to national laws.