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

According to CoinDesk, the EU's latest digital asset tax transparency legislation will take effect on January 1.

The directive, known as DAC8, extends the EU's long-standing framework for administrative cooperation in taxation to crypto assets and related service providers. The directive requires crypto asset service providers, including exchanges and brokers, to collect and report detailed user and transaction information to national tax authorities.

Subsequently, national tax authorities will share this data among EU member states. The DAC8 directive operates in parallel with the EU's Markets in Crypto-Assets (MiCA) regulation, but they are independent of each other. The MiCA regulation governs market behavior, while the DAC8 directive regulates tax flows.

The directive takes effect on January 1, but cryptocurrency companies are granted a transition period. Service providers must achieve 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.