Upcoming automatic data exchange for crypto transactions: Key points and recommended actions

The draft bill for the DAC 8 Implementation Act published on 25 October 2024 implements the EU directive, which is intended to create more transparency for crypto taxes. 

1. Planned Legislative Changes

The key points are:   
- Scope of application: Affects all crypto service providers (CASPs) in the EU (exchanges, wallet providers, brokers).  
- Reporting obligations: CASPs must collect and report detailed transaction data to financial authorities (e.g. dates, amounts, wallet addresses, identities of participants).  
- Automatic exchange: EU-wide disclosure of data for all crypto transactions from January 2026 onwards
- Assets covered: cryptocurrencies, stablecoins, NFTs and other digital assets.  
(Note: This is a draft bill - final regulations may still be adjusted)

2. Preparation of crypto transactions for the tax office  
To comply with DAC 8 and German tax regulations:  
- Documentation: keep complete records of all transactions, including:  
  - Date and type (purchase, sale, exchange).  
  - Amounts in euros (acquisition and disposal value).  
  - Wallet addresses and counterparties.  
- Tax tools: Use software (e.g. CoinTracking, Blockpit) to automatically calculate gains/losses and generate reports for the tax office.  
- Deadlines: Crypto profits must be declared in the annual tax return (submission deadline: July 31 of the following year, for tax advisors: February 28).  

Penalties: Failure to report can lead to additional payments, late payment penalties or criminal proceedings for tax evasion.  

3. Check voluntary disclosure for past transactions  
If previous crypto profits have not been taxed:  
- Requirements for an effective voluntary disclosure:  
  1. completeness: disclose all unreported income (also outside of crypto).  
  2. accuracy: Correct calculation of tax arrears, interest and penalties, if applicable.  
  3. timing: submit before the tax office initiates an external audit  
  4. payment: Settlement of the back payment immediately.  
- Procedure:  
  1. reconstruct old transactions (e.g. via stock exchange statements or blockchain explorer).  
  2. submit corrected tax returns for the years concerned.  
  3. submit a written voluntary disclosure to the responsible tax office.  

Risks: Incomplete information renders the voluntary disclosure ineffective - there is a risk of additional payments, fines (up to 10 % of the evaded tax) or criminal prosecution.  

4. Recommendation 
You can avoid conflicts with the tax office through early preparation and transparent documentation. I would be happy to provide you with an initial consultation.