DAC8 vs DAC7: Key Differences Explained

The European Union's Directive on Administrative Cooperation has evolved through multiple iterations, each expanding the scope of automatic tax information exchange. DAC7 and DAC8 are the two most recent additions, and while they share the same legislative framework, they target fundamentally different sectors of the digital economy. Understanding the differences between them is essential for businesses that may fall under one or both directives.

DAC7: Targeting Digital Platforms

DAC7, formally adopted in March 2021 and applicable from January 1, 2023, was designed to address the tax transparency challenges created by the rise of the platform economy. Its primary targets are digital platforms that facilitate the provision of services or the sale of goods by individual sellers.

Under DAC7, platforms such as online marketplaces, ride-sharing services, freelance platforms, and property rental websites must collect and report information about the sellers operating through their platforms. This includes income earned from selling goods, providing personal services, renting property, and renting any mode of transport.

The reporting obligation falls on the platform operator, which must identify sellers who exceed certain activity thresholds (more than 30 transactions or more than €2,000 in consideration during the reporting period) and report their income to the tax authority of the Member State where the platform is registered.

DAC8: Targeting Crypto-Assets

DAC8, adopted in October 2023 and applicable from January 1, 2026, shifts the focus from the platform economy to the crypto-asset market. Its primary targets are crypto-asset service providers (CASPs) — entities that provide services such as exchange, custody, transfer, and brokerage of crypto-assets.

Unlike DAC7's focus on income earned through platforms, DAC8 requires the reporting of all crypto-asset transactions, including purchases, sales, exchanges, and transfers, regardless of whether a profit or loss was realized.

Comparison of Key Elements

Scope of reporting entities. DAC7 covers digital platform operators across all sectors (goods, services, property, transport). DAC8 covers crypto-asset service providers as defined under MiCA, including exchanges, custodians, and transfer service providers. There is no overlap between the two sets of reporting entities, unless a platform also provides crypto-asset services.

Type of information reported. DAC7 requires platforms to report seller identity, income received, and the number of activities. DAC8 requires CASPs to report user identity (including TIN and tax residency), transaction types, gross amounts, fair market values, and the number of transactions per crypto-asset.

Due diligence requirements. Both directives require identity verification, but DAC8 imposes significantly more stringent requirements. CASPs must collect Tax Identification Numbers, obtain self-certifications of tax residency, and perform reasonableness checks. DAC7's due diligence is lighter, relying primarily on the information already collected by platforms for commercial purposes.

Reporting format. Both directives use standardized XML schemas for reporting to tax authorities. However, the DAC8 XML schema is aligned with the OECD's CARF XML schema, which is different from the DAC7 schema. CASPs must implement a reporting system that generates the specific DAC8/CARF XML format.

Thresholds. DAC7 applies activity thresholds (30 transactions or €2,000) to determine which sellers must be reported. DAC8 has no such thresholds — all users with reportable transactions must be included, regardless of the number or value of their transactions.

Penalties. Both directives leave the determination of penalties to individual Member States. However, given the higher sensitivity of financial transaction data and the alignment with OECD standards, DAC8 penalties are expected to be more severe in most jurisdictions.

International dimension. DAC7 is an EU-only initiative with no direct global equivalent. DAC8 is explicitly aligned with the OECD's CARF, meaning that its reporting requirements are part of a broader global framework that extends beyond the EU to all CARF-adopting jurisdictions.

Businesses Affected by Both Directives

Some businesses may fall under both DAC7 and DAC8. For example, a digital platform that facilitates the sale of goods using crypto-asset payment processing could potentially trigger obligations under both directives. In such cases, the business would need to comply with both sets of reporting requirements independently.

However, the European Commission has clarified that there should be no double reporting — transactions that are fully reported under one directive should not need to be reported again under the other, provided the tax authorities receive complete information.

Compliance Implications

For businesses currently compliant with DAC7, the transition to DAC8 will still require significant additional effort. The crypto-specific due diligence requirements, the different XML schema, the absence of reporting thresholds, and the need to collect TINs and self-certifications represent fundamentally new compliance challenges.

CASPs that have not previously dealt with EU tax reporting directives will need to build their compliance infrastructure from scratch, including data collection processes, validation systems, and reporting capabilities.

Conclusion

While DAC7 and DAC8 share the same legislative DNA, they are distinct frameworks targeting different industries with different requirements. CASPs must understand that DAC8 compliance cannot be achieved by simply adapting a DAC7 compliance program — it requires dedicated systems, processes, and expertise tailored to the specific demands of crypto-asset tax reporting.