Digital assets were long regarded as difficult to trace. DAC8 and Germany’s Crypto-Asset Tax Transparency Act will now make the sector significantly more transparent for tax purposes. In this article, Dr Beata Baroth of BBC European Tax explains what changes for crypto investors, which data will be reported and why complete documentation is more important than ever.<\/p>\r\n
Germany implemented DAC8 through its Crypto-Asset Tax Transparency Act(opens in new tab)<\/a>. The rules apply for the first time to the 2026 reporting period. Reporting providers must generally submit the information for a calendar year to the German Federal Central Tax Office by 31 July of the following year. For the first reporting period, this generally means a deadline of 31 July 2027.<\/p>\r\n The new rules do not create a separate crypto tax or change which transactions are substantively taxable. They expand reporting and due-diligence obligations, thereby increasing the information available to the tax authorities.<\/p>\r\n Under section 11 KStTG(opens in new tab)<\/a>, the reported information includes user identification data and, separately for each type of crypto-asset, aggregated details on relevant acquisitions, disposals, exchanges and certain transfers. This may include gross amounts, units and the number of reportable transactions. The legislation does not, however, provide for a blanket report of every wallet balance or the entire transaction history with each exact purchase and sale price.<\/p>\r\n Whether a token, service or transaction is covered must be assessed under the statutory definitions. Blanket statements that all NFTs, DeFi applications or staking transactions automatically fall within DAC8 are therefore too broad.<\/p>\r\n Providers established outside the European Union may also be covered when they offer relevant services to reportable users in the EU. Using a foreign platform is therefore not a reliable way to avoid tax transparency.<\/p>\r\n In parallel, the OECD’s Crypto-Asset Reporting Framework(opens in new tab)<\/a> is intended to expand cross-border exchanges of information. Depending on the participating jurisdiction, the first international exchanges are expected in 2027 or 2028. It would therefore be premature to claim that comprehensive CARF exchanges are already taking place worldwide.<\/p>\r\n Transactions on public blockchains are generally visible, but initially only under pseudonymous wallet addresses. A public key alone does not directly reveal the user’s identity. Once wallet addresses are linked to an individual through platform, KYC or other investigative data, transaction information can be reviewed and compared with tax returns more easily.<\/p>\r\n Consistent records are the best preparation for questions from the tax authorities. Investors should maintain, in particular:<\/p>\r\n Tax software can make the process easier. An automatically generated report is only as complete and reliable as the imported data, wallet mappings and selected settings. Missing information may lead to queries or estimates by the tax authorities.<\/p>\r\nWhich data will be reported?<\/h3>\r\n
Foreign platforms and CARF<\/h3>\r\n
Blockchain data: pseudonymous, not invisible<\/h3>\r\n
What investors should do now<\/h3>\r\n
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One-year period and EUR 1,000 exemption threshold<\/h3>\r\n