The European Union is moving closer to implementing legislation that will enforce crypto companies to provide tax relevant information to authorities about their clients holds. A draft bill released to CoinDesk in May has revealed the details about the plan. The bill follows the European Commission's proposal in December 2022 of stopping EU citizens from hiding their crypto in other countries to avoid taxes.

The newly proposed bill, referred to as DAC8 would require crypto asset operators to register with the European Commission by December 2025 and the rules would apply from the 1st of January 2026. Additionally, the law covers non-fungible tokens (crypto tokens which can be used for payments or investments) and even providers from countries outside the European Union.

Although the bill is still not finalized and have not received formal approval yet, it is likely that it will eventually gain approval. The draft bill also offers an additional solution to non-EU providers who will be able to report to foreign authorities that meet EU norms.

The implementation of this will be good news and beneficial for crypto companies and users, as it would mean less tax evidence that needs to be reported and more security and freedom. DAC8 will be aiming at initiative and ensuring that cryptocurrency investors abide by the law by not evading taxes and will show just how serious the European Union is about implementing laws for cryptocurrencies.

This also shows that the European Union is committed to creating a legal framework for the digital currency industry and is taking concrete steps in that direction. The bill is expected to create a tax template that would be easier for companies to adhere to and at the same time would protect the tax evading investors from acting illegally.



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