Due to the new EU Guideline; DAC8 (Crypto and e-money) measure[1] being implemented, the Dutch Tax Authorities (“DTA”) will be able to see the crypto assets and e-money held by Dutch taxpayers.
DAC8 is the latest addition to a set of data exchange rules. A set of reporting requirements already exists for traditional financial instruments (such as bank deposits) and financial intermediaries (such as banks). However, income from holdings in crypto-currencies and the like may also be subject to taxation. In the Netherlands, this could include taxation in Box 3. However, in order to properly enforce this tax obligation, it is necessary for the Tax Authorities to have accurate and complete information. The existing provisions of the DAC, for example DAC2, provide for international reporting requirements for financial intermediaries, but not yet (fully) for holdings in crypto and e-money. DAC8 aims to change this.
With DAC8, the European Commission wishes to strengthen the existing rules and extend the framework for information exchange in the tax area to cryptocurrency/assets and e-money. The public consultation on DAC8 has now been completed. The DAC8 proposal is planned to be published in the third quarter of 2021.
How DAC8 will function has to be seen in the near future. But in practice we must understand that crypto is still built on one of its core principles; anonymity.
It is still possible to store crypto on an anonymous online wallet or an anonymous hardware wallet. Due to the anonymous character of these wallets it should be a challenge to establish whether these wallets and its contents are the property of a certain taxpayer.
On the other hand it DAC8 should make it easier to see the crypto assets that a taxpayer might hold on an online exchange that has a KYC procedure, in another EU-member state.
[1] Scarcella, L., Suso, M. A., & Reinarz, P. (2021, 29 maart). Exchange of Information on Crypto-Assets at the Dawn of DAC8. Kluwer International Tax Blog. Geraadpleegd op 3 februari 2022, van http://kluwertaxblog.com/2021/03/29/exchange-of-information-on-crypto-assets-at-the-dawn-of-dac8/
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