The tax regulatory landscape for crypto assets is undergoing a fundamental transformation. The EU DAC8 (Digital Asset Tax Transparency Directive) bill has been officially adopted and will come into effect on January 1, 2026. This means the era of relatively ambiguous crypto taxation in the past is coming to an end.

The core mechanism of DAC8 is not actually complicated—it establishes a mandatory system for automatic information exchange. In simple terms, tax authorities of the 27 EU member states will, for the first time, have the ability to systematically track crypto asset transactions.

How does it work specifically? All crypto asset service providers operating within the EU, including exchanges, brokers, custody wallets, and others, are required to collect and report user identity information and transaction data. This information includes user names, addresses, tax identification numbers, and complete transaction records—covering fiat conversions, crypto-to-crypto trades, large transfers, and more.

More importantly, tax authorities across different countries will share data automatically. In other words, your transaction records in Germany can be accessed by tax authorities in Italy and Romania as well. This is a mandatory directive at the EU level, and member states must incorporate it into their national laws by the end of 2025.

What does this change mean for traders active within the EU? Compliant tax reporting will no longer be optional but an obligation. The transparency of crypto asset taxation is increasing at an unprecedented pace.