DAC8 to Extend Disclosure of Tax Rulings to HNWIs

On 8 December 2022, the European Commission announced the eighth amendment of the Directive for Administrative Cooperation in taxation (Directive 2011/16/EU, DAC8). With the Directive for Administrative Cooperation, introduced transparency rules to enhance the automatic exchange of information.

DAC8 will extend the automatic exchange of information to include advance cross-border rulings used by high-net-worth individuals (HNWIs). HNWIs will be those who hold at least € 1 million in investable wealth or assets under management, excluding the individual's main residence.

DAC8 is expected to enter into force on 1 January 2026. However, Member States will exchange information on the advance cross-border rulings issued, amended or renewed between 2020 and 2025.

However, not all Member States offer tax rulings for HNWIs and the European Commission expects the numbers to be limited, but significant from a tax perspective. 'The absence of reporting and exchange of this type of information leaves loopholes that can be exploited for tax evasion and avoidance since rulings for high-net-worth individuals are often related to corporate taxation', it says.


DAC8 will also require financial institutions to report e-money and digital currency transactions. All providers of virtual asset services, irrespective of their size or location, will have to report crypto-asset transactions for customers resident in the European Union. This obligation comes in addition to the oblgiations that will be imposed by the EU anti-money laundering regulations and the proposed Markets in Crypto-assets Regulation (MiCA).

MiCA sets the framework for access to the EU market for crypto-assets but does not give tax authorities a basis to collect and exchange the information that they need to tax crypto-asset income. It does, however, require crypto-asset service providers to be authorised, so that they can be identified for tax reporting purposes. DAC8 will apply to all crypto-asset service providers whether they are regulated under MiCA or not.

This extra-territorial reach of DAC8 must ensure that crypto-assets service providers located in the EU do not move elsewhere. 'The proposal covers businesses that provide their services to EU residents, regardless of where such service providers are located'. 'This means that the scope is global and that EU service providers will have nothing to gain from leaving the EU.'

The draft text will be submitted to the European Parliament for consultation and to the European Council of Ministers for adoption. The new reporting requirements with regard to crypto-assets, e-money and digital currencies are expected to enter into force on 1 January 2026.