DAC8 Budget Planning: Estimating Compliance Costs

DAC8 compliance requires investment in technology, processes, and people. This article helps CASPs estimate and plan their DAC8 compliance budget.

Cost Categories

DAC8 compliance costs fall into several categories:

Technology costs. Software development or vendor licensing fees for XML generation, TIN validation, transaction classification, and reporting tools. Infrastructure costs for data storage, processing, and secure transmission. Integration costs for connecting DAC8 systems with existing platforms.

Personnel costs. Project team salaries during implementation. Ongoing compliance staff costs for annual reporting, quality assurance, and regulatory monitoring. Training costs for compliance, operations, and customer support teams.

External advisory costs. Legal advice on national transposition interpretation. Tax advisory services for complex classification questions. External audit or quality review of compliance processes.

Operational costs. Look-back campaign costs for existing users (communication, support, data processing). Ongoing user communication about DAC8 requirements. Report submission and correction processing.

Cost Drivers

Several factors significantly influence the total cost of DAC8 compliance. The number of users directly affects look-back and data collection costs. The number of supported crypto-assets and transaction types affects classification complexity. The number of jurisdictions served affects TIN validation and regulatory monitoring costs. The current state of data infrastructure determines how much new development is needed. And the choice between in-house development and vendor solutions affects both upfront and ongoing costs.

Budget Ranges

For small CASPs (fewer than 10,000 users), total first-year compliance costs may range from €50,000 to €150,000, with ongoing annual costs of €20,000 to €50,000. For medium CASPs (10,000 to 500,000 users), first-year costs may range from €150,000 to €500,000, with ongoing costs of €50,000 to €150,000. For large CASPs (over 500,000 users), first-year costs may exceed €500,000, with ongoing costs scaled accordingly.

These ranges are illustrative and depend heavily on the specific circumstances of each CASP.

Conclusion

DAC8 compliance is an investment, not an optional expense. CASPs should budget realistically, plan for contingencies, and view compliance spending as a cost of maintaining market access in the EU.