The European Union is preparing the nuclear tax bomb on crypto: DAC 8.

According to some estimates, the tax shortfall on crypto amounts to hundreds of millions, or even billions, of euros.

Moreover, while several million French people are thought to hold crypto (this is an estimate; no precise data exists), only 22,000 people have declared gains or losses on crypto to date!

The French tax authorities therefore fully intend to get their share of the pie. And they want to pull out all the stops.

But this weapon is not new. Foreign bank accounts are well acquainted with it: broadly speaking, an obligation to transmit, every year, to the French tax authorities (as well as to the tax authorities of the other EU Member States) summary information on the crypto activity of French residents.

Automatic Transmission of Information by Platforms

This rule has been adopted (Directive (EU) 2023/2226 of 17 October 2023, known as DAC 8): it requires all platforms worldwide (not only European ones) to transmit AUTOMATICALLY and EVERY YEAR the information they hold on each of their clients who are tax residents in the EU.

Example: you are a tax resident of France. You have an account on Binance, or Kraken, etc. Every year, Kraken (and the other platforms, Binance, etc.) will automatically transmit to the French tax authorities a kind of summary table of your transactions for the year. Sales for fiat are of course covered, but not only those. Crypto-to-crypto exchanges are too. The information transmitted would therefore be broad. Furthermore, even “small” wallets would be covered: there would be no threshold.

It would probably work like the automatic transmission of banking data on foreign accounts: every year, Bercy receives from foreign banks Excel spreadsheets listing the surname, first name, address, tax identification number (if known to the foreign bank), account balance and income credited to the account. Bercy then makes a selection of the most “interesting” taxpayers and redistributes the selected files to the local tax offices, which then take charge of the tax audit.

For crypto, it will probably be the same: average wallet value in fiat equivalent, annual amount of purchases, annual amount of sales, annual amount of crypto-to-crypto exchanges , annual amount of staking income.

This regulation has been adopted: it enters into force on 1 January 2026, with the first information transmitted in 2027.

The possible 2024/2025 bull run would not be directly covered (DAC 8 applies to transactions carried out from 1 January 2026), but the information transmitted could lead the tax authorities to take an interest in earlier years.

The 2021 one, perhaps too: it remains to be seen how far back the obligation will go, and whether the platforms will merely play along to the minimum or go above and beyond.

How Should You Respond?

If you did everything by the book (3916-bis returns, 2086 return), in principle there is no particular cause for concern. Otherwise, consult a lawyer in order to start building up defence elements in case of a future problem (indeed, you need to prepare in advance; afterwards, it will be too late).

Before the First DAC 8 Exchanges (2027), How Does It Work?

To date, I observe that the tax authorities have no technical means of control. Officials have little or no training in crypto, or in crypto taxation. During tax audits (I have been handling tax audits for 2 years, since the first crypto tax audits began) officials are ill-equipped and can only rely on two types of information: banking information (fiat received on French or foreign accounts) and the information that the audited person (my client) is willing to give them (in their own interest, of course: good faith, etc.).

In the event of an audit, many defence options exist, often effective, and sometimes even leading to the annulment of the procedure.

Be careful, however: nothing is magic. Success often depends on several factors combined: the client had built up defence elements in advance; the lawyer has a thorough knowledge of crypto and tax procedure and has already handled several crypto tax audits; and luck (which officials you come across: officials in the plural, because through certain actions it is possible to bring in officials other than the one in charge of the audit, which is often beneficial).