DAC8 Penalties: What Happens If You Don't Comply?

Non-compliance with DAC8 carries real consequences. While the directive leaves specific penalty amounts to individual Member States, the enforcement framework ensures that CASPs face meaningful sanctions for failing to meet their reporting obligations.

Types of Non-Compliance

DAC8 non-compliance can take several forms. Failure to file, where the CASP does not submit any report for a reporting period. Late filing, where the report is submitted after the deadline. Incomplete reporting, where the report is missing data for reportable users or transactions. Inaccurate reporting, where the data submitted contains errors in user identification, transaction amounts, or classifications. Failure to perform due diligence, where the CASP does not collect required TINs, self-certifications, or other identification data. And failure to retain records, where the CASP does not maintain the documentation required for audit purposes.

Each type of non-compliance may trigger different penalty levels, with deliberate or systematic violations attracting the most severe sanctions.

Penalty Categories

Member States are expected to implement penalties across several categories. Administrative fines are monetary penalties imposed per violation, per missing data element, or per day of delay. These are the most common enforcement tool. Compliance orders are formal directions from the tax authority requiring the CASP to take specific corrective actions within a specified timeframe. Publication of non-compliance involves public disclosure of the CASP's failure to comply, which can cause reputational damage. And criminal sanctions apply in cases of deliberate evasion or obstruction, where penalties may include criminal prosecution of responsible individuals.

Proportionality Principle

EU law requires that penalties be proportionate to the violation. This means that minor administrative oversights should attract lighter penalties than systematic failure to report, while deliberate non-compliance should face the most severe sanctions. CASPs should not assume that first-time or minor violations will be ignored, but they can expect that penalties will be scaled to the severity and intent of the non-compliance.

Conclusion

DAC8 penalties are designed to ensure meaningful compliance. CASPs should invest in robust compliance programs not only to avoid penalties but also to protect their reputation and regulatory standing.