COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Initiative to strengthen existing rules and expand the exchange of information framework in the field of taxation so as to include crypto-assets Accompanying the document Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation
Date: 2022-12-08
Institutions: Directorate-General for Taxation and Customs Union, European Commission
Subjects: European tax cooperation, administrative cooperation, exchange of information, fraud, provision of services, tax avoidance, tax evasion, virtual currency

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 8.12.2022  SWD(2022) 401 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Initiative to strengthen existing rules and expand the exchange of information framework in the field of taxation so as to include crypto-assets Accompanying the document Proposal for a Council Directive amending Directive 2011/16/EU on administrative cooperation in the field of taxation {COM(2022) 707 final} - {SEC(2022) 438 final} - {SWD(2022) 400 final} - {SWD(2022) 402 final}  
 
 
Table of Contents 

1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT .................................................................. 7 

2.  PROBLEM DEFINITION ..................................................................................................................... 10 

2.1 What are the problems? .................................................................................................................... 11 

2.2 What are the problem drivers? .......................................................................................................... 14 

2.3 How will the problem evolve in the absence of an EU policy initiative? ......................................... 16 

3. WHY SHOULD THE EU ACT? ............................................................................................................ 17 

3.1 Legal basis ........................................................................................................................................ 17 

3.2 Subsidiarity: Necessity of EU action ................................................................................................ 17 

3.3 Proportionality: The added value of EU action................................................................................. 17 

4. OBJECTIVES: WHAT IS TO BE ACHIEVED? ................................................................................... 19 

4.1 General objectives ............................................................................................................................. 19 

4.2 Specific objectives ............................................................................................................................ 19 

5. WHAT ARE THE AVAILABLE POLICY OPTIONS? ........................................................................ 21 

5.1 Baseline scenario (Option 0) ............................................................................................................. 26 

5.2 Recommendation for the implementation of a global standard (Option 1) ....................................... 27 

5.3 EU legislative initiative – Six options regarding the type of reporting and the impact of having a 
threshold for SME- (Options 2-7) ........................................................................................................... 27 

5.4 Options discarded at an early stage ................................................................................................... 29 

6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ............................................................... 31 

6.1 Overview of options .......................................................................................................................... 31 

6.2. Economic impacts ............................................................................................................................ 31 

6.2.1. Benefits ............................................................................................................................................. 31 

6.2.2. 

Costs ............................................................................................................................................ 34 

6.2.2.1 Impact on CASPs ................................................................................................................ 36 

6.2.2.2 Impact on tax administrations and Commission ................................................................. 37 

6.2.3. 

Impact on sector’s competitiveness and SMEs ........................................................................... 38 

6.2.4. 

Social and environmental impacts .............................................................................................. 39 

7. HOW DO THE OPTIONS COMPARE? ................................................................................................ 42 

8. PREFERRED OPTION .......................................................................................................................... 44 

9. HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? ..................................... 46 

9.1 Indicators for monitoring and evaluation .......................................................................................... 46 

9.2. Monitoring and reporting ................................................................................................................. 46 

1 

 
 
 
 
 
 
ANNEX 1: 

PROCEDURAL INFORMATION ..................................................................................... 48 

ANNEX 2: 

STAKEHOLDER CONSULTATION ................................................................................ 51 

ANNEX 3:  WHO IS AFFECTED AND HOW? ................................................................................... 60 

ANNEX 4:  ANALYTICAL METHODS ............................................................................................... 65 

ANNEX 5: 

IT SOLUTION .................................................................................................................... 71 

ANNEX 6:  STRENGTHENING OF ADMINISTRATIVE COOPERATION BETWEEN TAX 
AUTHORITIES .......................................................................................................................................... 76 

ANNEX 7:   OVERVIEW OF DIFFERING PENALTIES APPLIED BY MEMBER STATES ............. 79 

ANNEX 8:  BIBLIOGRAPHY ............................................................................................................. 105 

2 

 
 
 
 
 
 
 
 
 
Glossary 

Term or acronym 

Meaning or definition 

AML(D) 

Asset-referenced token 

Binance 

Bitcoin  

Blockchain 

CBDC 

Cold wallet 

Crypto-asset 

laundering 

Anti-money 
(Directive).  The  European 
Commission  has  presented  a  package  of  legislative 
proposals to strengthen these rules in July 2021. 

A type of crypto-asset that purports to maintain a stable 
value by referring to the value of several fiat currencies 
that are legal tender, one or several commodities or one 
or several crypto-assets, or a combination of such assets. 

Binance is a CASP founded in 2017 and registered in the 
Cayman  Islands.  It  is  often  considered  as  one  of  the 
largest  exchange  in  the  world  in  terms  of  daily  trading 
volume of crypto-assets. 

Bitcoin (₿) is a type of crypto-asset. It is a decentralized 
virtual  currency,  without  a  central  bank  or  single 
administrator  that  can  be  sent  from  user  to  user  on  the 
peer-to-peer  bitcoin  network  without  the  need  for 
intermediaries.  Transactions  are  verified  by  network 
nodes  through  cryptography  and  recorded  in  a  public 
distributed ledger called a blockchain. 

A  form  of  distributed  ledger  in  which  details  of 
transactions are held in the ledger in the form of blocks of 
information. A block of new information is attached into 
the  chain  of  pre-existing  blocks  via  a  computerised 
process by which transactions are validated.  

Central bank digital currency. A CBDC may be defined 
as a digital asset that only the central bank may issue or 
destroy,  that  is  traded  at  par  against  banknotes  and 
reserves, that is available 24/7, that may be used in peer-
to-peer  transactions  and  that  circulates  on  digital  media 
that are at least partially different from existing media. 

A wallet that is not connected to the internet. Cold wallets 
may include paper wallets (where the public and private 
keys  are  recorded  on  a  piece  of  paper)  and  hardware 
wallets (where a USB stick or similar device is  used as 
the storage medium). 

A digital representation of value or rights, which may be 
transferred  and  stored  electronically,  using  distributed 
ledger technology or similar technology.  

3 

 
 
 
 
 
Crypto-asset service 

Any of the services and activities relating to any crypto-
asset: the custody and administration of crypto-assets on 
behalf of third parties; the operation of a trading platform 
for  crypto-assets;  the  exchange  of  crypto-assets  for  fiat 
currency  that  is  legal  tender;  the  exchange  of  crypto-
assets for other crypto-assets; the execution of orders for 
crypto-assets on behalf of third parties; placing of crypto-
assets;  the  reception  and  transmission  of  orders  for 
crypto-assets on behalf of third parties; providing advice 
on crypto-assets. 

Crypto-asset service provider 
or CASP  

Any person whose occupation or business is the provision 
of one or more crypto-asset services to third parties on a 
professional basis. 

Cryptocurrency 

See "Virtual currency" 

Cryptography 

Custodian wallet provider 

Directive on administrative 
cooperation or DAC 

The conversion of data into private code using encryption 
algorithms,  typically  for  transmission  over  a  public 
network. 

  An  entity  that  provides  services  to  safeguard  private 
cryptographic  keys  on  behalf  of  its  customers,  to  hold, 
store and transfer virtual assets. 

Directive  on  administrative  cooperation  in  the  field  of 
direct  taxation.  Rules  and  procedures  under  which  the 
Member  States  shall  cooperate  with  each  other  with  a 
view  to  exchanging  information  that  is  foreseeably 
relevant  to  the  administration  and  enforcement  of  the 
domestic laws of the Member States concerning taxes of 
any kind except value added tax and customs duties, or 
excise duties.  

Distributed ledger technology 
or DLT 

A  type  of  technology  that  supports  the  distributed 
recording of encrypted data. 

EMA 

ECA 

E-money 

E-money token 

Electronic Money Association 

European Court of Auditors 

Electronically,  including  magnetically,  stored  monetary 
value  as  represented  by  a  claim  on  the  issuer  which  is 
issued  on  receipt  of  funds  for  the  purpose  of  making 
payment transaction, and which is accepted by a natural 
or legal person other than the electronic money issuer. 

Stands  for  "electronic  money  token".  Means  a  type  of 
crypto-asset  mainly used as a means of exchange and that 

4 

 
 
 
 
 
Ethereum 

FATF 

Fiat currency 

JRC 

KYC 

purports  to  maintain  a  stable  value  by  referring  to  the 
value of a fiat currency that is legal tender. 

Ethereum  is  an  open  source,  public,  blockchain-based 
distributed  computing  platform  and  operating  system 
featuring smart contract functionality. 

The  Financial  Action  Task  Force  (FATF)  is  the  global 
money laundering and terrorist financing watchdog. The 
inter-governmental body sets international standards that 
aim to prevent these illegal activities and the harm they 
cause  to  society.  The  FATF  has  developed  the  FATF 
Recommendations,  or  FATF  Standards,  which  ensure  a 
co-ordinated global response to prevent organised crime, 
corruption and terrorism. 

Fiat currency is a type of currency that is declared legal 
tender including money in circulation such as paper 
money or coins. 

Joint Research Centre 

For  "know  your  customer".  Customer  due  diligences 
(CDD)  required  by  Anti  Money  Laundering  Directive 
(AMLD) to identify and verify the identity of customers 
and beneficial owners for financial institutions and certain 
non-financial institutions and professionals. 

Markets in Crypto-Assets or 
MICA 

Proposal for a Regulation of the European Parliament and 
of the Council on Markets in Crypto-assets, and amending 
Directive (EU) 2019/1937. 

Non-marketable crypto-assets  A crypto-asset that is not traded in a market or does not 
require intervention by a professional CASP for carrying 
out  transactions.  They  are  usually  only  transmitted 
through peer-to-peer transactions. 

OECD  

Organisation 
Development  

for  Economic  Co-operation 

and 

Peer-to-peer transaction 

Also known as "P2P". Individual user-to-individual user 
of crypto-assets transaction. 

Pseudo-anonymity 

The  result  of  the  processing  of  personal  data  in  such  a 
manner that the personal data can no longer be attributed 
to  a  specific  data  subject  without  the  use  of  additional 
information, provided that such additional information is 
technical  and 
kept  separately  and 
organisational measures to ensure that the personal data 

is  subject 

to 

5 

 
 
 
 
 
SMEs  

Transfer 

User 

Utility token 

Virtual currency 

Wallet 

are  not  attributed  to  an  identified  or  identifiable  natural 
person. 

Small and medium-sized enterprises 

A  transfer  is the  movement  of  a  crypto-asset  to  a 
different wallet. Wallets can be the so-called cold wallets 
which are not managed by CASPs but by the users itself, 
or a wallet managed by a different CASPs. All transfers 
and transactions are performed via blockchain. 

Any individual or legal person who uses e-money or the 
services of a CASP. 

A  type  of  crypto-asset,  which  is  intended  to  provide 
digital access to a good or service, available on DLT, and 
is only accepted by the issuer of that token. 

A  digital  representation  of  value  that  is  not  issued  or 
guaranteed by a central bank or a public authority, is not 
necessarily attached to a legally established currency and 
does not possess a legal status of currency or money, but 
is  accepted  by  natural  or  legal  persons  as  a  means  of 
exchange and which can be transferred, stored and traded 
electronically. 

A  device,  physical  medium  or  software,  used  to  store 
public and private keys and to interact with DLT to allow 
users to send and receive crypto-assets and monitor their 
balances.  See  also  "Cold  wallet"  and  “custodian  wallet 
provider”. 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1. INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

In  the  political  guidelines  for  the  European  Commission,  President  von  der  Leyen  stressed  the 
Commission’s commitment to stepping up the fight against tax fraud, evasion and avoidance to 
ensure an  economy that works for people1 and where everybody pays their fair share. Fair and 
efficient  taxation  not  only  promotes  social  justice  for  citizens  and  a  level  playing  field  for 
businesses but also ensures that citizens and businesses can fully reap the benefits of the Internal 
Market. The COVID-19 pandemic has added greater urgency to the need to protect public finances 
and to ensure fair burden sharing.  

On 15 July 2020, the European Commission adopted an Action Plan for Fair and Simple Taxation 
Supporting  the  Recovery  Strategy2  (hereafter  referred  to  as  the  “Tax  Action  Plan”).  The  Tax 
Action Plan contains measures to reinforce the fight against tax abuse, to help tax administrations 
to keep pace with a constantly evolving economy and to ease the administrative burden for citizens 
and companies. Furthermore, the Tax Action Plan envisages improving administrative cooperation 
between national tax authorities in existing as well as newly developing areas.  

The European Parliament has on several occasions stressed the political importance of fair taxation 
and of fighting tax fraud, evasion  and avoidance. For example, in  a  resolution3 from  2019, the 
European  Parliament  called  on  the  Commission  to  do  more  to  fight  tax  fraud,  evasion  and 
avoidance  including  through  greater  administrative  cooperation  and  exchange  of  information 
between  Member  States.  More  recently,  the  European  Parliament  published  a  resolution  about 
implementing the EU requirements for the exchange of tax information  highlighting aspects  to 
improve administrative cooperation, some of which are addressed by this initiative.4 

Fair taxation and the fight against tax fraud, evasion and avoidance are priorities shared by the 
Council and the European Parliament. Better administrative cooperation and greater exchange of 
information  between  tax  administrations  are  essential  in  the  fight  against  tax  avoidance  and 
evasion. Major progress has been made over the past years in this respect.  

The mechanism for cooperation and exchange of information within the EU for the purpose of 
direct taxation is framed by the Council Directive 2011/16/EU on administrative cooperation in 
the field of direct taxation5 (hereafter referred to as “Directive 2011/16/EU” or “DAC”). Through 
the  provision  of  an  efficient  mechanism  for  administrative  cooperation  and  exchange  of 
information  between  Member  States,  the  DAC  aims  at  protecting  the  financial  interests  of  the 
Member States and the EU while fighting against tax fraud, evasion and avoidance. To this effect, 
it ensures a proper functioning of the Internal Market, greater transparency, as well as an overall 

1 Political guidelines for the next European Commission. (2019-2024). A union that strives for more – My agenda for Europa   
2 European Commission. (2020). Communication from the Commission to the European Parliament and the Council, An action plan for fair and 
simple taxation supporting the recovery strategy, COM(2020) 312 final.  
3  European  Parliament.  (2019).  European  Parliament  resolution  of  26  March  2019  on  financial  crimes,  tax  evasion  and  tax  avoidance 
(2018/2121(INI)). 
4 European Parliament. (2021). European Parliament resolution of 16 September 2021 on the implementation of the EU requirements for exchange 
of tax information: progress, lessons learnt and obstacles to overcome  
5 Council Directive 2011/16/EU of 15 February 2011 on administrative cooperation in the field of taxation and repealing Directive 77/799/EEC, 
OJ L 64/1. 

7 

 
 
 
 
 
 
                                                           
fair taxation system. The scope of DAC has been extended six times over the last years in order to 
meet new challenges and adjust to new economic realities.6 

Table 1 – DAC evolution 

Directive on Administrative Cooperation – DAC 

DAC1  
2011/16/EU  

DAC1  
2011/16/EU  

DAC2  
2014/107/EU  

DAC3  
2015/2376/EU  

DAC4  
2016/881/EU  

DAC5  
2016/2258/EU  

DAC6  
2018/822/EU  

DAC7  
2021/514/EU  

Applies 1/2013

Applies 1/2015

Applies 1/2016

Applies 1/2017

Applies 6/2017

Applies 1/2018

Applies 7/2020

Applies 1/2023

1st exchanges 
30.6.2015  

1st exchanges 
30.9.2017  

1st exchanges 
30.9.2017  

1st exchanges 
30.6.2018  

1st exchanges 
31.8.2020  

1st exchanges 
2.2024  

 Automatic 
exchange of 
information  
of:  
-Advance 
cross-
border rulings

-Advance 
pricing 
agreements.  

-Exchange of 
information 
on request  
-Spontaneous 
exchange of 
information 
-Presence 
in adm. offices

-Simultaneous 
controls  
-Request for 
notification  
-Sharing best 
practices  
-Use of 
standard 
forms  

-Automatic 
exchange of 
information 
(AEOI) on 5 
non-financial 
categories  
-Income from 
employment  
-Directors fees  
-Pensions  
-Life insurance 
products  
-Immovable 
property 
(income and 
ownership)  

Automatic 
exchange 
of financial 
account infor
mation :   
-Interests, 
dividends and 
other income 
generated by 
financial accou
nt;  
-Gross 
proceeds from 
sale 
or redemption;  
-Account 
balances.  

Automatic 
exchange of 
information  
on country-
by-country-
reports on 
certain 
financial 
information:  
-Revenues;  
-Profits;  
-Taxes paid 
and accrued;  
-Accumulated  
earnings;  
-Number 
of employees;  
-Certain 
assets.  

Access by tax 
authorities to 
beneficial 
ownership 
information as 
collected under 
AML rules.  

-Mandatory 
disclosure 
rules for inter
mediaries; 
and  
-Automatic 
exchange of 
information  
on tax 
planning cross
-border 
arrangements.

Automatic 
exchange of 
information 
and reporting 
rules for 
digital 
Platform 
Operators wit
h respect to 
income earned 
by Sellers with 
the use of their 
platforms for 
the sale of 
services and 
goods.  

The mechanism for the exchange of information under DAC is in most instances based on a two-
step approach: 1. reporting to the tax authorities by the taxpayer or a  third party (e.g. financial 
institution  or  service  provider),  and  2.  exchange  between  the  tax  authorities  concerned  of  the 
information that has been reported. 

New challenges are constantly arising and may not be covered by the existing scope of the DAC. 
In  particular,  the  emergence  of  alternative  means  of  payment  and  investment,  such  as  crypto-
assets,  which  may  pose  new  risks  of  tax  evasion,  are  not  covered.  Therefore,  this  impact 
assessment presents policy actions to expand the exchange of information within the EU to cover 
income or revenue generated by these new means of payment and investment.  

Crypto-assets are digital assets based on distributed ledger technology and cryptography. Crypto-
asset  markets  have  been  growing  fast  over  the  past  years.  In  September  2020,  the  European 
Commission adopted a proposal for a Regulation on Markets in Crypto-assets (hereafter referred 
to as “MiCA”)7 , which will have, once agreed by the legislators, the effect of expanding the EU 

6 Directive 2014/107/EU (DAC2), Directive 2015/2376/EU (DAC3), Directive 2016/881/EU (DAC4), Directive 2016/2258/EU (DAC5), Directive 
2018/822/EU (DAC6), Council Directive (EU) 2021/514 (DAC7). 
7  European  Commission.  (2020).  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on  Markets  in  Crypto-assets, 
and amending Directive (EU) 2019/1937, COM/2020/593 final.   

8 

 
 
 
 
 
 
  
  
 
 
 
  
 
  
  
  
  
  
  
 
  
  
  
 
  
  
 
  
  
 
 
 
  
 
  
 
  
  
  
                                                           
regulatory  perimeter  to  a  range  of  crypto-asset  activities.  The  inherent  cross-border  nature  of 
crypto-assets  requires  strong  international  administrative  cooperation,  so  as  to  ensure  effective 
regulation. The proposed MiCA legislation regulates the market for crypto-assets and provides for 
the conditions for access to the EU market for crypto-assets. This framework, once adopted, would 
replace national rules currently governing for example the issuance, trading and custody of crypto-
assets.  This  framework  does  not  by  itself  provide  a  basis  for  tax  authorities  to  collect  and 
exchange the information that they would need in  order to  tax crypto-asset  income. This  being 
said, the  planned  DAC8  proposal  would  build  on  this  proposed  framework,  including  on  the 
definitions of crypto-assets and service providers.  

The  Commission’s  package  of  legislative  proposals  to  strengthen  the  EU’s  Anti-Money 
Laundering/Countering  the  Financing  of  Terrorism  framework  (hereafter  referred  to  as 
“AML/CFT”)8 includes a proposal to extend the scope of obliged entities subject to AML rules, to 
the  virtual  asset  service  providers  regulated  by  MiCA.  The  AML  package  adopted  by  the 
Commission  in  July  2021  aims  at  extending  the  EU  AML  rules  to  all  crypto-assets  service 
providers  (hereafter  referred  to  as  CASPs).  This  means  that  CASPs  will  have  to  ensure  the 
availability of certain information relative to crypto-assets (for example as the name of the payer, 
the payer's payment account number, the payer's address, customer identification number or date 
and place of birth). Information gathered for AML purposes can be useful for tax authorities, which 
is demonstrated by a previous amendment to DAC (DAC5) which provides a basis for the use of 
AML information for tax purposes. However, the information gathered for AML purposes is not 
fully sufficient  for tax purposes.  It  is  intended for other purposes than taxation and neither the 
information collected, nor the procedure for collecting it are adapted to the needs of tackling tax 
fraud, evasion and avoidance.  

The EU initiatives, in particular the proposed legislation on MiCA and the Anti-Money Laundering 
(AML) package, contribute to better regulating the crypto-assets market, improving traceability 
and greater transparency at large. However, it does not improve transparency for tax purposes, as 
envisaged by the proposal for DAC8.   

An amendment of the DAC is therefore necessary in order to provide for clear reporting obligations 
with information that is relevant for tax purposes, due diligence rules and a specific mechanism 
for exchanging information between Member States, which would not be provided by the MiCA 
Regulation nor by the AML package.  

The OECD initiative, which is currently still under negotiation at the international level, aims at 
introducing greater tax transparency on crypto-assets. It is important to ensure consistency between 
the international OECD and EU rules in order to increase effectiveness of information exchange 
and to reduce the administrative burden. However, an OECD framework would not eliminate the 
need for an EU framework. In particular, a future OECD standard is not expected to be binding 
and  would  therefore  not  achieve  the  same  coordinated  regulation  across  participating  Member 
States. It has been standard practice to bring OECD agreements into EU law through directives 
and it has been used for DAC2, 3, 4, 6 and 7. There is a need to ensure a coordinated approach 
within  the  EU  with  as  few  variations  as  possible.  There  is  furthermore  a  need  to  ensure 
that the exchanges of information on crypto-assets can be integrated into the existing EU system 

8  European Commission. (2021). Proposal for a Regulation of the European Parliament and of the Council on the prevention of the use of the 
financial system for the purpose of money laundering or terrorist financing, COM (2021) 420 final, 2021/0239 (COD). 

9 

 
 
 
 
 
                                                           
of  exchange  of  information. Finally,  only  an  amendment  to  the  DAC  can  ensure  the  necessary 
coherence of rules on reporting and exchange for tax purposes with the previously mentioned EU 
initiatives (proposal for a MICA regulation and AML package).  

The European Court of Auditors (ECA) published a report9 examining the legal framework and 
implementation of the DAC. This report notes that “Cryptocurrencies are excluded from the scope 
of information exchange. If a taxpayer holds money in electronic cryptocurrencies, the platform 
or other electronic provider supplying  portfolio services for  such customers  are not  obliged to 
declare any such amounts or gains acquired to the tax authorities. Therefore, money held in such 
electronic instruments remains largely untaxed.”  

It is important to clarify that this initiative focuses on the reporting and exchange of information 
between tax administrations on the income obtained by the users of crypto-asset services and the 
use of this information by tax administrations, to ensure the proper application of domestic tax 
rules. It does not aim at setting out new rules regarding the actual taxation of such proceeds based 
on each Member State’s national rules, nor does it cover the taxation of the profits made by the 
CASPs  and whether they,  as  companies, pay their fair share in  relation  to those profits.  Those 
aspects may be addressed through separate initiatives and work streams. 

A legislative initiative addressing the issue of exchange of information on crypto-assets (DAC8) 
is likely to include some fine-tuning of existing concepts in the DAC and filling in some gaps. 
Areas  that  could  be  covered  touch  upon  a  further  strengthening  of  administrative  cooperation 
between  tax  authorities,  a  review  of  the  current  compliance  framework,  a  clarification  of  the 
reporting and exchange rules applicable to information about e-money and the opening up of the 
information exchange on cross-border tax rulings to further types of rulings. Those improvements 
are briefly presented in Annex 6 but are not economically assessed in this impact assessment.  

2.  PROBLEM DEFINITION 

The following analysis has been performed in order to estimate how significant the problem is, 
although the actual lack of available data has made this analysis challenging. Also, the problem 
drivers have been examined and the evolution of the problem - in the absence of an EU policy 
initiative  –  has  been  assessed.  A  problem  tree  chart  has  been  included  to  visually  present  the 
problem, its drivers and consequences. 

9  European  Court  of  Auditors.  (2021).  Special  Report  N°03/2021:  Exchanging  tax  information  in  the  EU:  solid  foundation,  cracks  in  the 
implementation. Pages 20 and 29. 

10 

 
 
 
 
 
 
 
                                                           
Figure 1 Problem Tree  

2.1 What are the problems? 

The key problem that this impact assessment focuses on is that tax authorities lack information to 
monitor the proceeds obtained using crypto-assets and the potential tax consequences of those. 

In other words, there is a lack of information available to tax administrations regarding crypto-
assets, while the crypto-assets market has gained in importance over the last years. The crypto-
assets  market  capitalization  has  increased  substantially  and  rapidly,  reaching  more  than  EUR 
1.8 trillion in 2021.10 Although Bitcoin11 maintained a very high market share in the early years, 
its relative importance has decreased lately due to the increasing use of other new cryptocurrencies, 
such as Ethereum.  In September 2021,  Bitcoin’s market  share was  around 42,8%, followed by 
Ethereum (18,8%) and Cardano (3,69%).12 

Crypto-assets, like more traditional financial products, are a stock of wealth and can be taxed as 
such. But more generally, it is the capital gains arising from the trading of crypto-assets that are in 
principle subject to taxation under the national law of Member States. Those capital gains arise 
either when (i) crypto-assets are traded for other crypto-assets or (ii) a fiat currency is traded for 
crypto-assets and back to a fiat currency.  The trading can be carried out using crypto-asset service 
providers  or  between  individuals  or  entities  directly.  Information  on  the  details  of  these 

10 https://coinmarketcap.com/de/largest-companies/ (accessed on September 29, 2021). 
11 Bitcoin is a digital currency that is not backed by a central bank and is used for payment or investment purposes. 
12 https://coinmarketcap.com/charts/ 

11 

 
 
 
 
 
  
                                                           
transactions is available through the service providers when they are involved. In cases where no 
service provider is involved, the information is more difficult to obtain and would require detailed 
knowledge of the information on the blockchain. 

The fact that there is no reporting (or underreporting) and the lack of exchange of data related to 
revenues and income gained by investments in and transactions made with crypto-assets means 
that  tax  administrations  lack  the  necessary  information  to  ensure  that  taxes  are  imposed  and 
effectively paid by taxpayers. Whilst it is difficult to precisely quantify this particular tax gap, it 
represents a current and future problem that needs to be addressed keeping in mind that the use of 
these assets is expected to increase substantially in the future. There is also significant potential 
for eroding the proper functioning of the existing exchanges under DAC213, which is a key tool in 
ensuring tax transparency on cross-border financial investments and tackling offshore tax evasion.  

The majority of Member States already have legislation14 or at least administrative guidance in 
place to tax capital gains obtained through crypto-asset investments. However, they often lack the 
necessary information  that would enable them to  do so.15  Figure 2 shows the estimated capital 
gains, both realised and unrealised, of Bitcoin owners in 2020, ranked by realised capital gains. In 
2020, the total realised capital gains by EU citizens amounted to EUR 3.6 billion and the total 
unrealised capital gains to EUR 9.1 billion, according to a study by Thiemann (2021).16  

Assuming that the realised capital gains had been reported by the taxpayers and taxed at a rate of 
25% (without any tax exemptions) by the relevant Member State, tax revenues of about EUR 0.9 
billion  could  have  been  collected  in  2020,  taking  only  into  consideration  Bitcoin.  The  lack  of 
reporting rules at national level, as well as the lack of exchange of information between Member 
States means that non-compliant taxpayers are difficult to detect, which leads to revenue losses. 
At the same time, there is no information available about how much realised capital gains have 
actually been taxed by the Member States. This makes it challenging to determine the exact impact 
of the proposed initiative. 

13 Directive 2014/107/EU introducing the exchange of financial account information 
14 While some Member States are planning to introduce changes to their national legislation (e.g. Slovenia).  
15 OECD. (2020). Taxing Virtual Currencies: An Overview of Tax Treatments and Emerging Tax Policy Issues.  
16 Thiemann (2021). Cryptocurrencies: An empirical view from a tax perspective, JRC Working Papers on Taxation and Structural Reforms, No 
12. 

12 

 
 
 
 
 
 
 
 
 
 
                                                           
Figure 2 Estimated capital gains from Bitcoin in 2020 across EU countries, realised (green) 
and unrealised (red) 

Source: Thiemann (2021) based on Chainalysis Inc. 
Note:  Flows are attributed to individual countries relying on country-based web traffic statistics, time-zone analysis of  service providers’ 
cryptocurrency activity, most popular fiat currency pairs, and additional information (see Chainalysis, 2020); exchange rate to calculate EUR 
values from the original USD values, as of May, 25, 2021 (1 EUR = 1.2212 USD).  

It  is  relevant  for  the  assessment  of  the  problem  and  its  impacts  to  note  that  there  are  already 
reporting obligations on financial institutions and certain assets, but they are clearly not sufficient. 
The existing provisions of DAC2 lay down an obligation for financial intermediaries to report 
financial  account  information  to  tax  administrations  that  are  then  required  to  exchange  this 
information with other relevant Member States.  

Crypto-assets are currently not considered a reportable information under DAC2 and thus within 
its scope (or its equivalent at the international level, the Common Reporting Standard or CRS). 
They neither represent money held in a depository accounts or in financial assets as they are not 
considered a commodity or security under the domestic law of most Member States. In addition, 
crypto-asset  service  providers  are  in  most  cases  not  considered  to  be  covered  by  the  existing 
definition of “financial institutions” under DAC2. Currently, tax administrations have few tools 
available to verify whether the proceeds earned through investments in crypto-assets are properly 
declared and, if so, whether the correct amount has been declared. As pointed out by the European 
Parliament,  “defining  tax  bases  requires  being  in  possession  of  a  full  picture  of  a  taxpayer’s 

13 

 
 
 
 
 
 
 
 
 
situation”.17 Consequently,  there might  be an incentive to  invest in  crypto-assets  rather than in 
traditional financial products with the aim to avoid DAC2/CRS reporting.  

National tax administrations may use the information received related to crypto-assets through the 
exchange of information proposed under this initiative for a range of purposes, such as imposing 
taxes,  conducting  risk-assessments  and  tax  audits  relating  to  different  tax  categories  including 
indirect  taxes  like  Value  Added  Tax  (VAT).  The  most  relevant  tax  for  the  calculation  of  the 
benefits derived from this proposal are linked to income tax due to the potential capital gains that 
taxpayers may obtain. 

The consequences of the lack of reporting and exchange of information on crypto-assets indirectly 
affects all EU citizens and businesses. Tax fraud, evasion and avoidance lead to fewer resources 
to fund public services such as education, healthcare, pensions and infrastructure. To maintain the 
level of public services, everybody must contribute according to the legal framework in force. To 
support  and  sustain  the  recovery  from  the  deep  economic  crisis  caused  by  COVID-19,  it  is 
necessary to ensure that a fair taxation system contributes to this objective. Compliant taxpayers, 
who pay their fair share of taxes, are particularly affected as they may be asked to pay higher taxes 
and/or they may have to accept a lower level of public services. Cost reduction achieved by not 
paying taxes is not an acceptable practice in the EU or elsewhere. Furthermore, the absence of a 
reporting standard for crypto-assets could be considered an incentive to invest in such products 
since  users/investors  would  not  be  subject  to  the  same  verification  regime  as  other  traditional 
financial assets. This may affect the level playing field, fairness and integrity of the EU Internal 
Market.  

2.2 What are the problem drivers? 

The problem related to the lack of information available to tax authorities regarding the proceeds 
obtained using crypto-assets has various drivers and causes:  

The  lack  of  centralized  control  for  crypto-assets,  hybrid  characteristics,  and  the  rapid 
evolution  of  the  underlying  technology  and  its  form  present  challenges  from  a  taxation 
perspective. The said characteristics mean that reporting and taxation obligations are unclear and 
can be easily avoided. These assets escape current definitions in tax law in part due to the targeted 
nature of those definitions. Furthermore, users or investors can use this form of assets for payment 
as well as trading purposes, which is different from how traditional assets are traded and invested 
and  which  makes  its  taxonomy  and  the  potential  tax  compliance  framework  more  complex  to 
design.  These  difficulties  follow  from  the  need  to  identify  the  relevant  intermediaries,  the 
reportable event, the valuation of crypto-assets and the available information, among other things. 
Like traditional financial assets, income or capital gains derived from crypto-assets may be subject 
to taxation depending on each Member State’s legal framework. However, proper enforcement of 
tax obligations relies on high-quality reporting and the ability of tax administrations to have access 
to the information. 

17  European  Parliament.  (2019).  European  Parliament  resolution  of  26  March  2019  on  financial  crimes,  tax  evasion  and  tax  avoidance 
(2018/2121(INI)). 

14 

 
 
 
 
 
 
                                                           
The crypto-asset market is highly mobile and digitalised. Crypto-assets are traded all over the 
world  through  service  providers  that,  in  turn,  have  great  mobility  since  they  can  be  located 
anywhere  in  the  world.  The  cross-border  nature  of  crypto-assets  means  that  reporting  rules  at 
national level are unlikely to adequately capture all necessary information.  

It represents overall an emerging market. The first cryptocurrency, Bitcoin, was launched in 
2009. As of today, there is a huge number of crypto-assets and CASPs and total crypto-asset users 
have increased from 5 million in 2016 to at least 100 million in 2020 with a market capitalization 
of total cryptocurrencies reaching EUR 1.8 trillion in September 2021. The crypto-asset markets 
are very dynamic. New crypto-assets with new features appear almost every day all over the world. 
There  are  more  than  9,000  different  crypto-assets  currently  available.  Although  this  is  both  an 
emerging and rapidly evolving market, the Commission proposals such as MiCA provide for the 
necessary  level  of  consistency  and  clarity  by  defining  what  crypto-asset  service  providers  and 
crypto-assets are.   

Pseudo-anonymity. Overall, in the crypto-asset markets, the level of transparency for tax purposes 
is  deficient.  This  new  technology  is  used  to  create,  hold  and  transfer  crypto-assets  without 
traditional third-party intermediaries clearly covered by existing legislation. The lack of a central 
authority, combined with pseudo-anonymity applying in some cases, may lead to risks of tax fraud, 
evasion and avoidance. The Commission proposal for a Regulation on MiCA establishes uniform 
requirements for transparency and disclosure for crypto-asset service providers and issuers. The 
proposed new AML rules will also require CASPs to identify their customers through customer 
due  diligence  measures,  to  comply  with  new  information  obligations  linked  to  crypto-assets 
transfers  and  to  report  possible  suspicious  transactions  involving  crypto-assets.18  The  DAC8 
proposal intends to solve the pseudo-anonymity feature from a tax perspective.  

In addition, there are substantial valuation difficulties due to the high level of price fluctuations, 
which poses a major problem to the computation of the overall holdings and capital gains for tax 
purposes. For instance, Bitcoin investors have experienced considerable volatility over the last ten 
years. The current absence of financial markets regulation for crypto-assets, pending adoption of 
the Regulation on MiCA, feeds into its volatility. This volatility may have been curbed to some 
extent as a result of the implementation by Member States of the Fourth  and Fifth Anti-Money 
Laundering Directive19, but is still significant. Apart from daily volatility, in which double-digit 
increases and decreases of its price are common, there were periods when the crypto-assets’ price 
changes have outpaced even their usually volatile swings, resulting in massive price bubbles. The 
unstable value of crypto-assets makes it difficult for tax administration to carry out their core tasks. 
The  value  is  one  of  the  essential  data  components  that  tax  administrations  need  to  be  able  to 
perform a high-level risk assessment.  

18 European Commission. (2021). Proposal for a Regulation of the European Parliament and of the Council on the prevention of the use of the 
financial system for the purposes of money laundering or terrorist financing, COM(2021)420 final. 
19 Designation of competent authorities for CASPs, honourability checks, etc 

15 

 
 
 
 
 
 
                                                           
2.3 How will the problem evolve in the absence of an EU policy initiative? 

In the absence of an EU policy initiative, the underreporting of income and revenues will increase 
in proportion to the growth of the crypto-asset market. Bearing in mind that this market is growing 
at  a  double-digit  annual  pace,  the  relevance  of  this  proposal  is  clear.  Tax  fraud,  evasion  and 
avoidance and the associated loss of tax revenues affect Member States’ resources and therefore 
their capacity to develop their policies. Indirectly all citizens are impacted. 

In the absence of a European framework for the reporting and exchange of information on 
crypto-assets  for  tax  purposes,  some  Member  States  may  decide  to  implement  a  domestic 
reporting framework for crypto-asset transactions. However, such domestic reporting framework 
would  not  be  sufficient  given  the  international  and  highly  mobile  character  of  the  market. 
Furthermore, Member States are likely to take different approaches to reporting and there will be 
no efficient exchange of such information amongst them. This would increase the risk of tax fraud, 
evasion and avoidance.    

With regard to peer-to-peer transactions, the risk of tax fraud, evasion and avoidance is even higher 
given that these transactions cannot be traced. The risk is that crypto-asset users could decide to 
change to peer-to-peer transaction in order to evade reporting. Consequently, the main difficulty 
stems from the fact that no CASPs are in-between and therefore, no reporting is possible.  

According to the targeted consultation of the Member States, most Member States have not  yet 
introduced any tax provisions or guidance at  national  level  concerning the reporting of crypto-
assets for tax purposes.  The introduction of divergent  reporting requirements  would result in  a 
more complex business environment: for a hypothetical CASP operating across 27 Member States. 
Costs of compliance with 27 different requirements would be higher than having to deal with one 
standard for reporting. Eventually, this would also create distortions in the Internal Market. If a 
CASP is based in a Member State without any requirement for reporting, yet operating in several 
Member  States,  it  may  have  a  competitive  advantage  vis-à-vis  a  CASP  that  provides  the  same 
services but is based in a Member State with a reporting requirement. More subtly, distortions may 
be created by differences between regulatory frameworks leading to a different compliance burden 
depending on the Member State. 

16 

 
 
 
 
 
 
 
 
 
 
 
3. WHY SHOULD THE EU ACT? 

3.1 Legal basis 

The legal basis of DAC relies on Articles 113 and 115 of the Treaty on the Functioning of the 
European Union (TFEU), which aim at ensuring the proper functioning of the  Internal Market. 
Article 113 of the TFEU provides a legal basis for the harmonisation of indirect tax systems of 
Member States,  as far  as needed to  ensure the functioning of the  Internal Market  and to  avoid 
distortion of competition. Article 115 of the TFEU provides for the approximation of such laws, 
regulations  or  administrative  provisions  of  the  Member  States,  which  directly  affect  the 
establishment or functioning of the Internal Market and make the approximation of laws necessary.  

The aim of the DAC is to ensure a legal instrument of high quality for enhancing administrative 
cooperation in the field of direct taxation, in order to allow functioning of the Internal Market by 
reducing  the  negative  effects  of  tax  avoidance  and  evasion.  Applying  the  same  conditions,  the 
same  methods  and  the  same  practices  for  administrative  cooperation  facilitates  the  work  and 
efficiency of the authorities in the fight against tax fraud, evasion and avoidance in the European 
Union. 

3.2 Subsidiarity: Necessity of EU action 

Based  on  their  current  national  legislations,  most  Member  States  may  not  be  able  to  access 
information about crypto-asset users that are not resident in that Member State. This is relevant for 
the taxation of the capital gains from crypto-assets, where taxation rights are usually based on the 
users' tax residency.  

According to the current state of play of the Member States’ legislation, the national legal basis is 
insufficient  for  effectively  collecting  information  from  CASPs.  In  some  countries,  there  is  no 
legislation  for  third  party  reporting.  In  other  countries,  the  current  state  of  legislation  does  not 
cover CASPs residing in other countries and through which their residents engage in crypto-asset 
transactions.  

Furthermore,  there  are  uncertainties  as  to  whether  domestic  legislation  applies  to  and  can  be 
enforced  upon  CASPs  resident  outside  the  jurisdiction.  Given  that  crypto-assets  markets  are 
internationalised  and  that  CASPs  can  easily  operate  remotely,  this  calls  for  a  coordinated  EU 
action. There is a need to act at the EU level to ensure that Member States can effectively access 
information on their tax residents, irrespective of the location of the service provider.    

3.3 Proportionality: The added value of EU action 

Given the need to act and the nature and extent of the problem set out in chapter 2, an EU approach 
to tax transparency on crypto-assets appears to be the best solution in order to avoid a patchwork 
of reporting requirements unilaterally implemented by some or all Member States. The information 
needs to reach the Member State where the income and revenues are due to be taxed. Still, it is 
often likely to be held by intermediaries located in another Member State or even in third countries.  

17 

 
 
 
 
 
Since the scope of a new reporting framework should define the (i) type of CASPs in scope, (ii) 
the crypto-asset users in scope, (iii) content of the information and (iv) timing of collection of the 
data,  a  coherent  and  comprehensive  solution  at  EU  level  would  result  in  a  relatively  lower 
administrative burden for both tax administrations, reporters and taxpayers. Furthermore, to ensure 
coherence, to reduce administrative burden for reporting entities and administrations and in order 
to  close  potential  loopholes  considering  the  volatile  nature  of  the  assets  in  question  it  appears 
justified to also include domestic CASPs and users in the scope. 

Given the developments at the international level, in particular work led by the OECD, some form 
of regulation is likely to be introduced by Member States at a certain stage. The fact that today 
there might be a lack of regulation in certain Member States does not imply that an EU initiative 
would cause disproportionate burden for administrations or reporting entities. Quite the contrary, 
the introduction of new EU provisions and procedures is expected to be less burdensome overall 
than the introduction of 27 different frameworks.  

The  added  value  of  EU  action  is  broadly  confirmed  in  the  public  consultation  where  the  vast 
majority  of  respondents  from  different  categories  and  sizes  stated  that  CASPs  should  have  the 
same reporting obligations for tax purposes throughout the EU in terms of laying down a single 
set of rules. 

18 

 
 
 
 
 
 
 
 
 
 
4. OBJECTIVES: WHAT IS TO BE ACHIEVED?  

4.1 General objectives  

The general objective is to ensure a fair and efficient functioning of the Internal Market where 
all taxpayers pay their fair share of taxes.  

In general, it can be observed that tax authorities characterise the crypto-assets market as a tax 
opaque  market.  This  initiative  will  increase  the  transparency  of  the  crypto-asset  market  by 
providing tax administrations with information that can reduce tax fraud, evasion and avoidance 
and better ensure a level playing field with the more traditional financial markets. 

The  crypto-asset  market  continues  to  increase  in  popularity.  This  new  market  brings  with  it 
benefits but also challenges, particularly when it comes to taxation and the risk of non-compliance 
with tax obligations.  

The crypto-asset market is an international market where users worldwide invest through different 
CASPs established in or outside the European Union. Its international nature leads to cross-border 
transactions, which makes it difficult  for tax administrations to  access  tax-relevant  information 
without an exchange of information.  

Extending  and  clarifying  the  reporting  obligations  concerning  the  creation,  transactions  and 
holdings of crypto-assets will provide legal certainty and increased transparency for the crypto-
assets market, in a manner that enables tax administrations to reduce tax evasion, avoidance and 
fraud. This initiative therefore also aims at safeguarding Member States’ revenues. 

This  initiative should therefore benefit national  treasuries  and  tax administrations.  At the same 
time, users and service providers will benefit from such an initiative because of the harmonised 
reporting framework across the EU. This will avoid a situation where individual Member States 
put in place national reporting frameworks, which may differ from jurisdiction to jurisdiction and 
would make it hard and more burdensome for service providers to comply. This element is one 
that applied equally to previous DAC amendments. 

This  proposal  intends  to  set  a  reporting  framework  regarding  crypto-assets  exchanges.  The 
proposal does not regulate how Member States tax the users’ capital gains, the holdings or any 
other direct or indirect tax related to crypto-assets. 

A CASP may be established in a jurisdiction that is not currently taxing any income derived from 
crypto-asset transactions, but its users might be tax resident in a different jurisdiction that taxes 
income derived from crypto-assets transactions.        

4.2 Specific objectives 

Specific  objectives  are  to  enhance  the  relevant  information  available  to  tax  administrations  to 
perform their duties more effectively and to reinforce the general compliance with the provisions 
of the DAC. This would allow tax administrations to monitor the risk of non-compliance with tax 

19 

 
 
 
 
 
rules and ensure proper tax collection. More specifically, the initiative will improve the ability 
of Member States to detect and counter tax fraud, evasion and avoidance.  

The initiative would require CASPs to report relevant information to tax administrations across 
the EU thereby ensuring a level playing field across the Union.  

Tax authorities' tasks to ensure the correctness of tax returns and to counter tax fraud, evasion and 
avoidance relies upon good quality and relevant information. If tax officers have the information 
they need, at the right time, to check that crypto-asset users declare what they obtained, it will be 
possible for them to better assess the tax due and ensure that tax is paid.   

In  addition  to  the  ability  to  actively  detect  and  counter  tax  fraud,  evasion  and  avoidance,  this 
initiative, once adopted, would also have deterrent effects. There is evidence that taxpayers are 
aware of a higher probability of  being  caught  for avoiding and evading  taxes20 with  automatic 
exchange of information measures in place. Automatic exchange of information is a most effective 
tool to foster voluntary compliance.21 In other words, by increasing the probability of detecting 
non-compliance, the initiative is expected to provide an incentive to declare and pay taxes owed. 

The monitoring of the implementation and the effects of the initiative will be carried out through 
yearly assessments where Member States provide quantitative and qualitative information to the 
Commission, including references to key performance indicators. 

20 Shaw, J., Slemrod, J., & Whiting, J. (2010). Administration and compliance. Dimensions of Tax Design. The Mirrlees Review. Oxford University 
Press, chapter 12, p. 1126. 
21 Beer, S, Coelho, M. and Leduc, S. (2019) Hidden Treasures: the impact of automatic exchange of information on cross-border tax evasion, IMF 
working paper, WP/19/286. 

20 

 
 
 
 
 
 
 
                                                           
5. WHAT ARE THE AVAILABLE POLICY OPTIONS?   

The starting point is the baseline scenario, against which various options are assessed. This chapter 
describes the options identified.  

The baseline scenario is based on the assumption that the EU level would not act and would leave 
any potential action or non-action to the Member States. 

A soft-law approach would establish some requirements for Member States to act but would not 
be legally binding, thereby providing them with some leeway to design an appropriate solution for 
the existing problem.  

A legislative option would imply a legally binding framework to encompass reporting by CASPs 
and  the  relevant  exchange  of  information.  Concerning  the  expansion  of  the  scope  of  DAC  to 
crypto-assets,  the  EU  would  intervene  to  regulate  the  adoption  of  reporting  and  exchange  of 
information obligations, building on the work of the OECD and existing EU proposals.22 In the 
broad lines, CASPs would be subject to reporting obligations under the DAC, and would therefore 
be required to collect information on users and report such information to the tax authority. Tax 
authorities would then be required to exchange this information with the relevant other Member 
State(s). 

In practice, the obligations that would fall on CASPs under the DAC would be largely equivalent 
to the ones already imposed on reporting subjects under DAC, such as financial institutions under 
DAC2  or  digital  platform  operators  under  DAC7.  Those  obligations  would  mainly  consist  of 
collecting and verifying relevant data to identify taxpayers and their respective Member State of 
residence and reporting information relative to the proceeds and holding of crypto-assets.   

Figure 3. Overview of Reporting and Exchange Mechanism 

CASPs in MS A

MS A

User's MS of residence

• collects information on

revenues/gains made by 
users

• sends it to MS A's tax 

administration 

• sorts information per MS 

of residence

• sends it to MS where user 

is tax resident

• receives the information
• risk analysis
• compliance activities

The design of the legislative options is influenced by the following building blocks: 

-  Which crypto-assets are in scope?  

Crypto-asset  definitions  commonly  refer  to  digital  or  virtual  assets  based  on  distributed  ledger 
technology  (DLT)  and  cryptography  as  part  of  their  perceived  or  inherent  value.  Additionally, 
these  assets  can  be  held  and  transferred  in  a  decentralised  manner  without  the  intervention  of 

22 MiCA and AML package. 

21 

 
 
 
 
 
 
 
                                                           
traditional  financial  intermediaries.  These  two  key  elements  distinguish  crypto-assets  from 
traditional financial assets already covered under DAC2.  

The proposal for a Regulation on MiCA defines crypto-assets as “a digital representation of value 
or rights which may be transferred and stored electronically, using distributed ledger technology 
or similar technology.”23  

The group of crypto-assets covered by the scope of the initiative is to a great extent similar to that 
of the proposal for the Markets in Crypto-Assets (MiCA) Regulation. The general definition used 
is the same and includes payment tokens, asset-referenced tokens and e-money tokens defined as 
follows: 

  The most well-known crypto-assets covered by the suggested definition, such as Bitcoin 
or  Ethereum  and  Litecoin,  are  designed  to  serve  as  a  general  purpose  store  of  value, 
medium of exchange or means of payment, and/or unit of account. They are sometimes 
referred to as “crypto currencies” or “payment tokens”.  

  “Asset-referenced tokens” aim to maintain a stable value by referencing several currencies 
that are legal tender, one or several commodities, one or several crypto-assets, or a basket 
of such assets and subsequently act as a means of payment to buy goods and services and 
as a store of value.  It is  suggested to  report  and  exchange information  on these crypto-
assets under the new regime for crypto-assets. Examples are LAToken, Salt and Tether. 
Asset-reference tokens together with e-money tokens make up what is called “stablecoins”. 
  “E-money tokens” are crypto-assets  with  a stable value based on only one fiat  currency 
that  aims  to  function  in  a similar  way  to electronic  money. However,  different  from  e-
money, e-money tokens referencing one fiat currency which is legal tender do not provide 
their holders with a claim on the issuers of such assets.  

  “Central  bank  digital  currencies” refers  to  digital  currencies  representing  a  claim  on  an 

issuing Central Bank.  

  Equity tokens are digital tokens or "coins" that represent equity shares in a corporation or 
organization. Debt tokens are tokenized assets that represent debt instruments such as real 
estate mortgages or corporate bonds. 

  Non-fungible  tokens:  A non-fungible  token (NFT)  is  a  unique  and  non-interchangeable 
unit  of  data  stored  on  a  digital ledger (blockchain). NFTs  can  be  associated  with 
reproducible digital files such as photos, videos, and audio. NFTs use a digital ledger to 
provide a public certificate of authenticity or proof of ownership, but it does not restrict the 
sharing or copying of the underlying digital file. The lack of interchangeability (fungibility) 
distinguishes NFTs from blockchain cryptocurrencies, such as Bitcoin. 

Two types of assets would not be reported under the crypto-asset reporting obligation framework, 
given their features:  

23 Article 3.1(2) of the proposed Regulation on MICA.  

22 

 
 
 
 
 
 
                                                           
o  “Utility tokens” are intended to provide digital access to a good or service, available 
on DLT, and are only accepted by the issuer of that token.24 Utility tokens are issued 
with non-financial purposes to digitally provide access to an application, services 
or  resources  available  on distributed  ledger networks.  Due  to  the  absence  of 
financial purposes these assets are rarely relevant for tax purposes. A start-up can 
create utility tokens for access to the services or products it is developing. Filecoin 
(FIL) is an example of a utility token. FIL holders gain  access to the platform’s 
decentralized cloud storage services. 

o  “Non-marketable crypto-assets" are not traded in a publicly available market or do 
not require intervention by a CASP. These assets are not covered by the initiative 
due to the fact that they are not usually subject to trading. An example is Sorare, a 
fantasy  football  trading  card  game,  where  users  can  exchange  the  cards  of  real 
players and manage their team to win prizes every week. The cards are all non-
marketable and are stored on blockchain.  

New Crypto-assets reporting framework 
(CARF) 

Payment tokens or exchange tokens 
(Bitcoin, Ethereum) 
Asset-reference tokens (such as Tether, 
USD Coin, Binance )  

CRYPTO-ASSETS TAXONOMY 
DAC2 

Not covered by the crypto-assets 
reporting obligation 

E-money tokens 

Utility tokens 

CBDC 

Non-marketable crypto-assets 

Equity and debt tokens 

NFT 

-  Which CASPs are in scope regarding reporting obligations? 

CASPs are defined as any person whose occupation or business is the provision of one or more 
crypto-asset  services  to  third  parties  on  a  professional  basis.25  They  can  perform  exchanges 
between  crypto-assets  and  fiat  currencies  or  exchanges  between  one  or  more  forms  of  crypto-
assets.  The  above  definition  is  narrower  than  the  definition  provided  in  the  proposal  for 
a MiCA Regulation. This is because services such as “providing advice”, covered in the MiCA 
Regulation  proposal,  do  not  have  any  relevance  for  establishing  holdings  or  capital  gains  that 
would be relevant for tax purposes. The “issuance” of crypto-assets is not covered either since it 
is not a transaction that will give rise to a measurable capital gain.  

24 OECD uses the term Closed-Loop Crypto-Assets to refer to those crypto-Assets redeemed for a specified good or service and transferred with 
the intervention of the issuer or the supplier of such good or service. (e.g. currency in a video game, a tokenised representation of frequent flyer 
miles, or a tokenised redemption right to a consumer good)  
25  According to MICA: ‘crypto-asset service’ means any of the services and activities listed below relating to any crypto-asset:  
(a)  the  custody  and  administration  of  crypto-assets  on  behalf  of  third parties;  (b)  the  operation  of  a  trading  platform  for  crypto-assets;  (c) the 
exchange of crypto-assets for fiat currency that is legal tender; (d) the exchange of crypto-assets for other crypto-assets; (e) the execution of orders 
for crypto-assets on behalf of third parties; (f) placing of crypto-assets; (g) the reception and transmission of orders for crypto-assets on behalf of 
third parties; (h) providing advice on crypto-assets. 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
CASPs can be, among others, exchanges, brokers and dealers, trading platforms (DEFi) as well as 
crypto-asset  ATMs.  They  play  a  crucial  role  in  facilitating  a  market  for  crypto-assets  and  are 
therefore best  placed to  collect  and  report information  relevant  for assessing tax liabilities (i.e. 
capital  gains  and  income),  including  details  of  gross  proceeds.  In  general,  these  intermediaries 
have access to the value of the crypto-assets and the transactions carried out.  

The  proposal  would  contemplate  that  the  new  reporting  and  exchange  framework  will  impose 
reporting  requirements  solely  on  CASPs  that  are  in  the  professional  business  of  conducting 
exchanges  of  crypto-assets.  CASPs  already  fall  under  the  scope  of  obliged  entities  under  the 
Financial  Action  Task  Force  (FATF)  Recommendations26  and  are  consequently  expected  to 
efficiently collect and review the required documentation of their customers on the basis of the 
AML/KYC27 requirements.  

In order to determine which CASPs are in scope regarding reporting obligations, two dimensions 
are being considered: size and location. As far as size is concerned, it can be envisaged whether 
(i) all CASPs should report, irrespective of their size, or whether (ii) an exclusion based on size 
should be introduced (i.e. SME CASPs).  

As far as location  is  concerned, it can be considered whether  non-EU based CASPs  should be 
subject or not to the reporting obligations28, in addition to EU-based CASPs.  In this respect, it 
should be noted that, once adopted, the Regulation on MiCA will oblige CASPs operating on the 
EU market to have their services authorized in the EU.29 This would facilitate the identification of 
non-EU based CASPs.  

CASPs that would be subject to an equivalent reporting standard, following  an agreement on a 
standard in the OECD, may be excluded from the scope of EU obligations. This would require an 
equivalence decision from the EU, similar to what has been adopted in the context of DAC 7 for 
reporting by non-EU digital platform operators. 

-  Which type of reporting?  

CASPs can provide services related to different types of crypto-assets, and to different types of 
transactions such as acquisitions, sales and transfers of crypto-assets but also safekeeping of assets 
and provision of financial services related to i.a. issuance of assets. The inclusion of crypto-asset 
transfers30 under the reporting and exchange framework would help catch transfers to cold wallets 

26 Definition of “Virtual assets service providers”, retrieved from: https://www.fatf-
gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf 
27 Anti-money laundering/know your client 
28 It should be noted that CASPs that would be subject to an equivalent reporting standard, following agreement in the OECD negotiations, may 
be excluded from the scope of an EU standard. This would require an equivalence decision from the EU, similar to what has been adopted in the 
context of DAC 7 for reporting by non-EU digital platform operators. 
29 According to Title V (articles 53 to 75) of MICA: CASPs will need to have a registered office in a Member State of the Union  and obtain an 
administrative authorisation to operate in the EU in accordance with article 55. In some cases, they may be subject to additional requirements. 
30 A transfer is the movement of a crypto-asset to a different wallet. These wallets can be the so-called cold wallets which are not managed by 
CASPs but by the users itself, or a wallet managed by a different CASPs. All transfers and transactions are performed via blockchain. 

24 

 
 
 
 
 
 
 
 
                                                           
and track the wealth of a particular taxpayer. It would assist tax authorities to reconcile information 
reported  from  several  CASPs,  in  case  a  taxpayer  uses  multiple  providers  for  acquiring  and/or 
selling crypto-assets. 

The reporting requirements need to take into account the characteristics of the asset and the type 
of information to be reported. Most crypto-assets are subject to very frequent transactions and their 
value can vary significantly even within very short timeframes. However, some crypto-assets are 
more stable in value and are in most cases not subject to daily multiple transactions. Two examples 
of the latter category are Central bank digital currency (CBDCs) and e-money tokens which are 
not subject to high fluctuations in value and are used mainly for payment purposes. 

Different reporting possibilities could be considered for crypto-asset reporting: 

The reporting of balances is an option under which the CASPSs would provide information about 
the crypto-assets balances of each user. This type of reporting is similar to what is required under 
DAC2  for  traditional  financial  assets,  where  information  is  exchanged  on  end-of-year  account 
balance.  

For  assets  that  are  characterised  by  a  stable  value  and  which  are  not  subject  to  very  frequent 
transactions, such as  CBDC and e-money tokens, it would not  be necessary to  require detailed 
reporting. For such assets, it would be sufficient to require reporting of balances and other relevant 
information,  similar  to  what  is  the  case  under  the  current  provisions  of  the  DAC  for  financial 
assets. 

In  terms  of  reporting  of  transaction-based  information,  three  alternatives  can  be  considered  in 
terms  of level  of granularity: reporting  (i) on a fully  aggregated basis, (ii) on a transaction-by-
transaction basis, (iii) on an aggregated basis with some breakdowns (hybrid option). 

During  a  meeting  organised  by  the  Commission  services  in  November  2020,  Member  States 
expressed  diverging  views  on  the  desired  level  of  granularity  of  reporting  of  gross  proceeds 
derived from crypto-asset transactions. Most Member States favoured a fully aggregated reporting 
of gross proceeds that would both have a deterrent effect and allow tax authorities to perform a 
high-level tax risk assessment before further investigation. Other Member States were in favour of 
an  approach  whereby  the  concrete  tax  liabilities  of  taxpayers  could  be  identified,  requiring  a 
transaction-by-transaction reporting scheme.  

With an aggregate reporting, tax administrations would receive a global picture of the value of 
and proceeds derived from all crypto-assets held by a taxpayer. Furthermore, the data transferred 
to the tax administration would be compressed and limited. However, this information may  not 
always be sufficient to allow tax administrations to assess the actual tax liability associated with 
specific transactions in crypto-assets and it may require additional requests for further information 
resulting in time-consuming contacts between tax administrations and reporting entities.  

With a transaction-by-transaction reporting, tax authorities would receive for each taxpayer an 
overview of each transaction it has engaged over the year (with information on type of transaction, 
type of crypto-asset, value and proceed of each transaction). Tax administrations would therefore 
have immediate access to all available information, which would remove the need for follow-up 

25 

 
 
 
 
 
contacts with other Member States or with CASPs also to ensure the necessary tax treatment in 
other  tax  areas  such  as  indirect  taxation.  However,  the  volumes  of  information  would  be 
considerable and it would entail high administrative burden and costs for tax administrations. 

In a “hybrid” or middle-ground scenario, reporting would be in-between aggregate gross proceeds 
reporting  and  full  transaction-by-transaction  reporting.  It  would  require  aggregate  reporting  on 
acquisitions, transfers and disposals per type of crypto-asset. It would also require distinguishing 
between crypto-to-crypto and crypto-for-fiat transactions to enhance the usability of the data for 
the receiving tax administrations. Additional financial information would be provided for further 
granularity, such as the number of transactions, the number of units transacted and the amount of 
any fees and commissions withheld by the CASPs in respect of relevant transactions. 

If relevant, the reporting on transaction-based information can be complemented with information 
on balances.  

On the basis of these building blocks, various options are assessed in the following analysis. 

The proposed IT implementation choices31 are feasible no matter which policy option is chosen. 
The feasibility of the IT solution depends neither on the size of the CASPs, nor on the types of 
crypto-assets  in  scope  nor  the  reporting  method.  The  issue  to  determine  with  regard  to  the  IT 
solution  is  more  about  the  efficiency  of  the  different  IT  solutions  in  achieving  the  initiative’s 
objectives. 

5.1 Baseline scenario (Option 0) 

Under this option, the EU would not act. However, other actors, mainly the Member States as well 
as the OECD, might still act. The use of crypto-assets has been growing a lot recently. While some 
Member States have not yet addressed the problem domestically, it does not mean that they will 
not act in the near future. Different approaches to the reporting for tax purposes across the EU may 
also have a negative effect on the crypto-asset market and the issuance and use of crypto-assets. 

The OECD is currently working on developing a new international standard intended to impose 
reporting obligations on CASPs and subsequent exchange of information between jurisdictions. A 
new  international  standard  would  include  an  obligation  for  CASPs  to  collect  and  provide  tax 
authorities with  certain  aggregated information. The granularity of the information  that CASPs 
would  be  required  to  provide  would  enable  tax  authorities  to  carry  out  effective  tax  risk 
assessments and provide visibility on transactions and holding patterns. Member States are likely 
to rely on this to implement rules at national level. However, there is a risk of divergences among 
the  Member  States’  legal  frameworks  that  would  jeopardize  the  coherence  of  the  system  for 
exchange of information within the EU as established by the DAC. It would also put at risk the 
integrity of the EU market in crypto-assets as regulated by the proposed MiCA Regulation. The 
OECD  standard  would  not  necessarily  be  adapted  to  the  domestic  provisions,  leading  to  the 
reporting of third country CASPs risking to be less effective.  

31 See Annex 5. 

26 

 
 
 
 
 
                                                           
5.2 Recommendation for the implementation of a global standard 

Under  this  option,  the  Commission  would  propose  a  legally  non-binding  recommendation 
addressed to Member States to implement consistent rules addressing the lack of reporting and 
exchange of information related to the taxation of income or revenue generated through the use of 
crypto-assets.  Such a  recommendation would call on the Member States to  implement  a future 
OECD standard and, to the extent needed, be complemented by guidance adapting such rules for 
the Internal Market. A non-legally binding option may imply that Member States do not implement 
the international standard uniformly, giving rise to differences that could affect the functioning of 
the Internal Market.  

5.3 EU legislative initiative – Six options regarding the type of reporting and the impact of 
having a threshold for SME- (Options 1-6) 

Under the EU legislative option, the reporting and exchange of information would apply to  all 
crypto-assets, which are relevant from a tax perspective (i.e. all crypto-assets  except non-
marketable crypto-assets and utility tokens).  

Under this option, the coverage would not include certain types of crypto-assets in the scope. This 
would be based on the fact that non-marketable crypto-assets and utility tokens are not traded on 
exchanges  and  mostly  do  not  have  a  value  outside  the  context  of  their  issuer.  Their  use  does 
generally not have any tax consequences and the information would therefore not be useful for tax 
administrations. 

As discussed above, the reporting would focus on transactional information, which would allow 
tax administrations to make a more precise risk assessment. Considering that many users make 
many transactions  within short time frames,  a reporting of information based on balances only 
would in many cases require tax administrations to ask the CASPs for more detailed information, 
thus creating a second round of more detailed reporting. For the CASPs, the option would mean 
that  less  information  would  need  to  be  reported  initially,  which  would  keep  the  administrative 
burden low. However, due to the likely frequent need for more detailed information, there would 
be an increased administrative burden in the second step of follow-up requests for information. 

Regarding  the  type  of  transactional  information  to  be  reported,  we  may  distinguish  three  sub-
options:  Aggregated  reporting,  transaction  by  transaction  and  hybrid.  In  all  cases,  a  SME32 
threshold is analysed against any of these three sub-options making them in total six sub-options. 

Option 1. Transaction by transaction. 

Under this policy option, the reporting and exchange of information would apply to all crypto-
assets, except non-marketable crypto-assets and utility tokens, introducing a reporting obligation 
on all CASPs that have EU users. In this case, the information would be reported on a transaction 

32 As defined in Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-
sized enterprises OJ L 124, 20.5.2003, p. 36. 

27 

 
 
 
 
 
                                                           
by transaction basis which means that each and every transaction made by a CASP for a crypto-
asset user will have to be reported.   

Under this option, CASPs would report the data concerning each transaction with crypto-assets 
owned by EU users. In the same way, as under Option 3 and 5, all CASPs would need to report as 
far as they intermediate EU users’ transactions, regardless of where they are located.  

The reported information would consist of detailed transactional information per crypto-asset user. 
Consequently, the level of information would be so precise that tax administrations would not need 
to seek additional information to calculate the taxes due by crypto-asset users. However, the mass 
of data that  would have  to be managed by CASPs and tax administrations would entail  higher 
investments in IT infrastructure to guarantee its functionality and operability, resulting in higher 
costs than other options.  

Option 2. Transaction by transaction with a SME threshold. 

This option is similar to the previous one, but it introduces a threshold for CASPs that are SMEs. 
In this case SMEs would not need to report. 

The costs associated to the initiative could be contained by introducing an SME threshold as the 
amount of information would be reduced. However, these thresholds would constitute a loophole 
in  the  system  as  some  users  would  prefer  to  use  SME  CASPS  to  avoid  having  information 
concerning their crypto-assets transactions reported, even though large value transactions could 
still be performed through SME CASPs.  

Option 3. Fully aggregated reporting: 

Under this policy option, the reporting and exchange of information would apply to all crypto-
assets, except non-marketable crypto-assets and utility tokens, introducing a reporting obligation 
of fully aggregated information on all CASPs that have EU users. Fully aggregated information 
would provide a general picture of the crypto-asset user’s transactions, which could only be used 
for risk assessment purposes. In case of need for additional information, tax administrations would 
have to request it from CASPs through a second round of reporting on request. Consequently, the 
fully aggregated option  would require  follow-up action from  the tax administration concerning 
taxpayers that present a higher level of risk.   

The absence of a threshold on the size of the CASPs would result in a more significant volume of 
information  being  reported  to  tax  administrations.  This  would  result  in  a  higher  administrative 
burden for tax administrations, but would equip tax administrations with different means to combat 
tax fraud, evasion and avoidance. However, this would lead to additional administrative burden 
for the CASPs of a smaller size, which would be proportionately more burdensome than for CASPs 
of a bigger size.  

Option 4. Fully aggregated reporting with an SME threshold: 

This option introduces a SME threshold to allow smaller CASPs not to be subject to the reporting 
obligations.  

28 

 
 
 
 
 
 A threshold on the size of CASPs would have two effects. Firstly, tax administrations would get 
a lower amount of information as more minor entities would not be reporting. Secondly, for CASPs 
below a specific size, it would mean that the administrative burden of reporting, which would be 
more significant as a share of the overall administrative burden than for larger CASPs, would be 
removed. However, there could be incentives for those users who intend to conceal their crypto-
assets tax information to act through those SME CASPs.  

Option 5. Hybrid or middle ground option: 

In  the  hybrid  or  middle-ground  option,  the  tax  administrations  would  receive  more  granular 
information than in a fully aggregated reporting system, allowing tax administrations to perform a 
high-level  risk  assessment  and  calculate  the  crypto-asset  user’s  capital  gains.  The  type  of 
additional data to be reported would be, for instance, the number of crypto-assets exchanged, the 
type of crypto-assets exchanged and the costs charged by CASPs for the transactions. As in the 
other options, all CASPS would need to report no matter where they are established, and only non-
marketable crypto-assets and utility tokens would be out of scope.  

The main advantage of this reporting method is that the amount of information to be managed by 
tax  authorities  and  CASPs  would  be  moderate  as  they  would  not  be  obliged  to  report  each 
transactional data. However, it would allow tax administrations to obtain the data required to limit 
the follow-up  requests  for information  to  the CASPs.  The detailed information  would  in  many 
cases suffice to directly calculate the potential capital gains of a user.  

Option 7.  Hybrid or middle ground option with a SME threshold: 

Under this policy option, the reporting and exchange of information would apply to all crypto-
assets, except non-marketable crypto-assets and utility tokens, and for all CASPs that have EU 
users. The information here would be reported on a middle ground basis.   

The introduction of a SME threshold would mean that SMEs do not incur the costs to aggregate 
and  report  the  information.  However,  as  in  the  previous  analyses,  this  option  would  not  avoid 
creating a potential loophole and distorting the EU market of crypto-assets. The effort that SME 
would  need  to  perform  to  comply  with  this  information  requirement  would  be  within  the 
proportionality framework, and therefore, it would be justified not to have any threshold on SME.  

5.4 Options discarded at an early stage 

Some of the options highlighted above were considered as not a viable way forward either because 
there  was  no  deemed  added  value  or  because  experience  with  similar  approaches  has  proven 
ineffective in the past: 

29 

 
 
 
 
 
 
 
 
Table 2 Options Discarded 

Option 
discarded 
Non-legislative 
approach 

5.2 

Section   Explanation 

5 

Only EU-based 
CASPs would 
be within the 
scope of the 
reporting 
framework. 

This  option  would  bring  no  added  value  as  the  OECD  framework 
would  be  developed  and  Member  States  that  would  wish  to  do  so 
would implement the framework. A Commission Recommendation 
would bring no added value as it would not be legally binding, hence 
it  would  not  address  the  issue  of  fragmentation  of  reporting 
requirements across the EU. In particular, it would still be for each 
Member  State  to  decide  on  the  introduction  of  such  reporting 
obligations and on their precise scope. In addition, the difficulty of 
enforcing domestic legislation vis-à-vis  CASPs resident in another 
jurisdiction  would  not  be  addressed.  Other  potential  consequences 
would be heterogeneous reporting obligations throughout the EU and 
distortion of internal market.  
Some of the intrinsic characteristics of crypto- assets are that they are 
highly mobile and digitalized and can therefore be exchanged all over 
the  world.  That  means  that  European  users  can  use  the  exchanges 
services  of  any  CASPs  no  matter  where  the  CASPs  have  their 
jurisdiction. A reporting of information framework where only EU-
based  CASPS  would  need  to  report  would  favour  non-EU-based 
CASPS against their European competitors, and would only provide 
limited information to EU tax adminsitrations. 

30 

 
 
 
 
 
 
   
 
 
6. WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

6.1 Overview of options 

The expected impacts of the options presented are discussed in more detail in the following section. 
These cover economic impacts (costs and benefits) on CASPs, national tax administrations and 
the  Commission,  impacts  on  sectors  competitiveness  and  SMEs,  as  well  as  social  and 
environmental impacts. All the policy options have been assessed against the baseline scenario. 

The table below provides an overview of available policy options considered in the analysis. 

Table 3 Policy options 

Option 1 

Option 2 

Option 3 

Option 4 

Option 5 

Option 6 

CASPs report 
detailed 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens. 
Threshold on 
CASP size does 
not apply. 

CASPs report 
detailed 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens. 
Threshold on 
CASP size 
applies. 

CASPs report 
aggregated 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens.  
Threshold on 
CASP size does 
not apply. 

CASPs report 
aggregated 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens. 
Threshold on 
CASP size 
applies. 

CASPs report 
hybrid 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens. 
Threshold on 
CASP size does 
not apply. 

CASPs report 
hybrid 
transactional 
information on all 
assets types 
except for non-
marketable 
crypto-assets and 
utility tokens. 
Threshold on 
CASP size 
applies. 

6.2. Economic impacts 

The  various  options  focus  on  improving  the  reporting  and  exchange  of  information  relative  to 
crypto-assets transactions. Still, there is a lack of official statistics on service providers and the 
underlying transactions they tend to facilitate, which would be needed to estimate the economic 
impacts of the initiative in a reliable manner. We do, however, estimate as much as possible both 
the  benefits  and  the  costs  of  the  measure  on  the  basis  of  reasonable  and  sound  assumptions 
combined with extrapolations based on available data. Despite the said limitations, these estimates 
can still provide a solid basis for policy-making purposes and the achievement of the objectives 
under this proposal. This should be taken as the best effort by the Commission services, to assess 
the most significant impacts of the initiative. 

6.2.1. Benefits 

One of the key aims of this initiative is to prevent tax fraud, evasion and avoidance stemming from 
crypto-asset transactions. As previously discussed, revenues earned through these are currently 
under-reported.  Better  reporting  and  exchange  of  information  should  therefore  have  a  positive 
impact on the revenues to be collected by tax administrations, which we try to estimate. 

31 

 
 
 
 
 
 
Central  to  the  benefits  estimation  stands  the  concept  of  capital  gains.33  Realised  capital  gains 
accrue when the selling price of a crypto-asset exceeds the price of their initial purchase and the 
asset is sold or exchanged.34 Such income may be subject to tax. The estimates provided hereafter 
are  therefore  based  on  the  previously  mentioned  exchange  dynamics.  Information  related  to 
Bitcoin has been used due to its prevalence on the cryptocurrency market and the availability of 
data. Data regarding other crypto market players is difficult to acquire and it is doubtful whether 
it would be reliable. Detailed information on the methodology used to estimate the benefits and 
the employed assumptions can be found in Annex 4. 

In 2020, the total realised capital gains by EU citizens from Bitcoin amounted to EUR 3.6 billion 
according to a study by Thiemann (2021).35,36 The employed data had been tracked by Chainalysis 
(a blockchain data platform) who are considered a trusted source of information.37 The distribution 
of capital gains  across  the Member States  is  uneven. Member States  have different  approaches 
when it comes to taxing realised capital gains, with some Member States not taxing them at all. 
The above-mentioned study has found that, by applying a uniform 25% tax rate on realised capital 
gains from Bitcoin across all Member States, approximately EUR 0.9 billion of tax revenue could 
have  been  collected  in  2020.  The  alternative  scenario,  the  one  applying  the  actual  tax  rates  on 
realised capital gains in the Member States, has produced similar results yielding roughly EUR 
0.85 billion of tax revenue. 

For simplicity reasons and taking into account the narrow difference in tax revenues between the 
two  analysed  approaches  in  the  study,  our  benefit  estimations  are  henceforth  based  on  the 
application of the 25% uniform  tax rate on total capital  gains  from  all crypto-assets.  However, 
since crypto-assets are prone to high volatility, as explained in the previous chapters, we have also 
performed a sensitivity analysis by introducing two additional rates of 15% and 35%. Besides this, 
and as explained in chapter 5, we have excluded non-marketable crypto-assets and utility tokens 
(as these types of crypto-assets are not relevant for tax purposes). The benefit estimates and the 
corresponding sensitivity analysis are presented in Table 4 below, while the rationale behind the 
estimated figures and the employed assumptions are detailed in Annex 4. 

Table 4 Tax revenue estimates from realised capital gains in 2020 and sensitivity analysis 

Uniform tax rates on capital gains 
15% 
25% 
35% 

Tax revenues estimates (in billion EUR) 
1.0 
1.7 
2.4 

When applying different uniform tax rates (as shown in the table above), the estimated tax revenues 
range between EUR 1 and 2.4 billion. These figures should be interpreted with caution as crypto-

33 Capital gains can be realised or unrealised. The latter is not being addressed in this section as only realised capital gains concern the analysis. 
34 Hungerford (2010). “The Redistributive Effect of Selected Federal Transfer and Tax Provisions”. 
35 Thiemann (2021). Cryptocurrencies: An empirical view from a tax perspective, JRC Working Papers on Taxation and Structural Reforms, No 
12.  
36 The analysis includes capital losses, but the aggregate outcome is positive (i.e. capital gains). 
37 Chainalysis has been commissioned by various governments, research agencies, financial institutions and insurance and cybersecurity companies 
worldwide, but even them experience limitations in collecting data (e.g. the use of VPN networks that hide the true location of transacting parties). 

32 

 
 
 
 
 
 
                                                           
assets (i.e. Bitcoin) may suffer even greater value oscillations (according to the available statistics) 
than what has been captured by our sensitivity analysis. This considerable volatility of the crypto-
assets’  value  hinders  reliable  growth  projections.  Besides  capital  gains,  crypto-assets  could  be 
subject to other types of taxes (e.g. wealth tax) and these additional tax revenues have not been 
reflected in the above estimates due to lack of data. Moreover, the benefit estimates cannot take 
into account behavioural responses and arbitrages. For example, some users might rely on peer-
to-peer transactions instead of relying on services transactions, which could obfuscate reporting 
and identification of crypto-asset generated profits. 

Nevertheless,  the  crypto  market  has  grown  exponentially  thus  far  and  it  is  likely  to  continue 
expanding. It can therefore be expected that the related tax revenues should increase over time as 
well.  

The estimated benefits in relation to the available options are summarised in the table below.  

Table 5 Assessment of benefits per policy option 

Option 

1 

2 

3 

4 

5 

6 

Assessment 
Direct benefits in terms of additional tax revenues are expected to exceed EUR 1 billion (i.e. the lower 
bound).  All  CASPs  with  EU  users  regardless  of  the  size  would  report  detailed  transactions  to  tax 
administrations. While all the necessary information will be available to tax administration, detailed data 
could  overburden  them,  leading  to  inefficiencies  linked  to  possible  processing  omissions  and 
consequently less tax revenue. 
Direct benefits in terms of additional tax revenues are expected to be lower than in Option 1, but still 
above the lower bound of EUR 1 billion. This is due to the exclusion criteria based on size, which reduces 
the number of reporting CASPs. Even though we do not have reliable information on how many SMEs 
operate as CASPs, it cannot be excluded that those smaller business have large(r) customer bases (i.e. 
there could be possibly a higher amount of unreported transactions). 
Direct  benefits  in  terms  of  additional  tax  revenues  could  amount  to  EUR  1.7  billion  (i.e.  the  middle 
bound).  All  CASPs  with  EU  users  regardless  of  the  size  would  report  aggregated  transactional 
information  to  tax  administrations.  The  aggregated  data,  however,  might  not  always  provide  enough 
information to ensure proper taxation, which would imply the need for the second round of information 
requests by the tax administrations that come with higher costs. The net benefits (taking into account the 
second-round information) are therefore likely to be lower compared to Option 1. 
This option is similar to the previous one, but it applies a threshold based on size, which could likely 
result in less benefits (direct and net) in terms of additional tax revenues. These benefits are expected to 
be close to the middle bound nevertheless. 
Direct benefits in terms of additional tax revenues could reach EUR 2.4 billion (i.e. the upper bound). 
The hybrid reporting approach would ensure a balance between too detailed transactional information to 
be reported by all CASPs with EU users regardless of the size (Option 1), and the need for second round 
information requests (Option 3). 
This option is similar to the previous one, but it applies a threshold  based on size, which could likely 
result in less benefits (direct and net) in terms of additional tax revenues. These benefits are expected to 
be close to the upper bound nevertheless. 

Even though the above benefit estimates give a quantitative indication concerning the impact of 
this legislative initiative, their materialisation may come with certain risks. In particular, the main 
risk lies with the actual use of the information obtained by Member States. While Member States 
are  expected  to  take  this  new  information  into  account  to  ensure  proper  taxation,  there  are 
variations across Member States regarding their ability to make the best use of the data. 

33 

 
 
 
 
 
 
6.2.2.  Costs 

Requirements for CASPs to report data and for tax administrations to exchange them will entail 
costs. The costs can be categorised as:   

  One-off, substantive compliance costs, incurred when a new (IT) system is introduced or 

when the existing one is being updated (i.e. development costs). 

  Recurrent administrative and, for tax administrations, compliance measure costs, to operate 

the systems once it has been set up and to ensure it works as expected.  

The cost analysis is built upon the costs of setting up and operating DAC2,38 which resembles most 
of the reporting obligations of this initiative. Additionally, the IT costs for tax administrations (see 
Annex 5) have been predicted with a relatively higher degree of precision due to the experience 
gained  with  previous  amendments  of  the  DAC.  Even  so,  these  calculations  must  overall  be 
approached with caution considering the absence of precise information on the market structure 
and scope of the transactions on the market.  However, since the  costs estimates must consider 
specificities of the crypto-market, additional assumptions and extrapolations had to be introduced. 
These were based on the analytical documents and statistics from Chainalysis (a blockchain data 
platform), Binance (a crypto-currency exchange) and Coin Market Cap (a price-tracking website 
for  crypto-assets).  The  need  for  combining  various  sources  of  information  is  a  result  of  the 
restricted availability of data, which consequently reduces the overall certainty of the projected 
costs.  The  computed  estimates  are  therefore  indirect  and  as  such,  fragile.  Annex  4  provides 
additional information on the categories of costs and benefits and on the assumptions made. 

In order to quantify the costs for service providers, as well as tax administrations, the following 
factors needed to be estimated: 

  The number of service providers (and accounts) facilitating transactions. Such a figure may 
vary depending on  whether there  are exemptions  and thresholds.  If the overall scope is 
broad and some exemptions are introduced, the number of reportable service providers will 
be lower than if the scope were without exemptions. 

  The  cost  of  complying  with  the  initiative,  ideally  per  service  provider  and  tax 
administration. The hypothesis is that, the more users (i.e. accounts) a certain provider has, 
the higher the costs. Therefore, providers with a relatively low number of accounts will 
bear lower costs than larger market players. At the same time, we would expect that the 
costs, one-off and recurrent, for one tax administration running controls on a higher number 
of accounts to be higher than for an administration running controls on fewer of them.   

We estimate that there are around 168 CASPs with EU users. In addition to this, we quantify the 
number of active accounts under the available service providers. It should be noted that for the 
sake of estimation, we use the available data on Bitcoin users (for CASPs). There, we assume that 
the number of accounts equals the number of users, even though having one or more accounts per 
user and investing in other cryptocurrencies on top of Bitcoin remains a possibility. Furthermore, 

38 Evaluation of the Council Directive 2011/16/EU (2019). 

34 

 
 
 
 
 
                                                           
in the absence of precise market data on crypto-assets, we have assumed that each asset category 
to be excluded represented a 3% market share (similar to benefit estimation). Given that two types 
of assets are to be excluded, this represents 6%. A sensitivity analysis has been performed as well 
to account for crypto-asset value volatility that may affect the customer base of a CASP, and for 
the  possibility  of  providing  additional  information  (second  round  requests)  to  the  tax 
administrations should they ask for it explicitly.  

The table below shows the summary of the estimated costs for CASPs. To estimate these, several 
assumptions have been used (see Annex 4). Detailed information in relation to the policy options 
considered is provided in the next section. 

Table 6 Summary of estimated costs for CASPs and sensitivity analysis (in EUR million) 

Sensitivity interval 
Reporting on all crypto-assets, except non-
marketable crypto-assets and utility tokens 

-10% 

233.1 

One-off 
0 

+10% 

-10% 

Recurrent 
0 

+10% 

259 

284 

20.3 

22.6 

24.9 

In terms of IT implementation, three solutions can be envisaged (see Annex 5 for details): (i) a 
decentralised system, which is the approach taken in DAC 1, 2 and 4 with bilateral exchanges of 
information between Member States, (ii) a centralised system, which has been implemented for 
DAC3  and  DAC6,  where  the  information  is  made  available  by  one  Member  State  to  the  other 
Member States via a central Directory, and (iii) a single access point, which would be a completely 
innovative solution, whereby CASPs would directly report into a central system accessible to all 
relevant Member States. The proposed IT implementation choices are feasible no matter which 
policy option is chosen. The feasibility of the IT solution depends neither on the size of the CASPs, 
nor on the types of crypto-assets in scope nor the reporting method. The question here is more 
about the efficiency of the different IT solutions in achieving the initiative’s objectives. 

The type of IT solution comes with different costs both, for the Commission and the national tax 
administrations.  These  are  summarised  in  the  table  below  and  explained  in  more  detail  in  the 
coming sections. 

Table 7 Summary of estimated costs for tax administrations and European Commission (in EUR 
million) 

IT solution 
Single Access Point 
Central Directory 
Decentralised IT solution 

Tax administrations 

European Commission 

One-off 
0.5 
1 – 13 
64.8 

Recurrent 
0.2 
1 – 5.7 
6 

One-off 
1.4 
0.5 
0.8 

Recurrent 
0.2 
0.2 
0.1 

Largely, the risk of non-materialisation of the estimated costs is rather limited. The forthcoming 
initiative would oblige tax administrations to make adjustments to their IT systems and include 
efforts to process and exchange the received information from CASPs. These actions will entail 
costs and as such, they have been accounted for in this impact assessment. 

35 

 
 
 
 
 
 
 
 
 
6.2.2.1 Impact on CASPs 

As displayed in Table 5, one-off cost estimates for CASPs will vary between EUR 233.1 million 
and  EUR  284  million,  or  roughly  between  EUR  1.4  million  and  EUR  1.7  million  per  service 
provider respectively. The total recurrent costs, on the other hand, are estimated to range between 
EUR 20.3 million and EUR 24.9 million, or roughly between EUR 120 000 and EUR 150 000 per 
entity respectively. These estimates cover all CASPs with EU users (see Annex 4).  

The costs39 are largely dependent on their customer base (on how many users they will need to 
report).  It  should  be  stressed  that  these  estimates,  including  on  number  of  users,  are  based  on 
several assumptions and they do not necessarily reflect the actual costs service providers will incur, 
especially those having to report a relatively low number of transactions. Additionally, there is a 
risk, though limited, for CASPs to pass through their costs onto consumers. In particular, due to 
the increased costs arising from this initiative, service providers might raise their service fees paid 
by their customers so as to offset (partly) the newly incurred costs. However, this is likely to be 
minimal  since  the  crypto-market  offers  a  possibility  of  transacting  with  crypto-assets  without 
intermediation.  

Table 8 Assessment of costs per policy option (CASPs) 

Option 

1 

2 

3 

4 

5 

Assessment 
Total one-off costs estimate  is  likely to  surpass EUR 233.1  million (i.e. the lower  bound). The SME 
(size) threshold does not apply. On an individual basis, this means approximately EUR 1.4 million in 
one-off costs per CASP. Analogously, recurrent costs incurred by CASPs would amount to EUR 20.3 
million in total or roughly EUR 121 000 individually. These relatively lower costs compared to other 
options  (except  for  Option  2)  are due  to  transaction-by-transaction  reporting,  which  does  not  require 
additional processing of data by CASPs before submitting it to tax administrations. 
The projected costs (both aggregated one-off and recurrent) are likely to be lower than in Option 1, but 
still above the lower bound. This is due to the SME threshold that here applies, and which means that a 
more reduced number of entities will incur costs. 
One-off costs are estimated to reach the upper bound of EUR 284 million (or EUR 1.7 million per CASP). 
The recurrent costs are estimated not to surpass EUR 149 000 (upper bound) per entity on a yearly basis. 
This option entails a slightly heavier reporting since service providers need aggregate data before sending 
it over to the tax administrations. The cost upper bound also reflects the need of providing additional 
information  to  the  tax  administrations  (second  round  of  information  requests)  since  data  aggregation 
does not necessarily disclose all the relevant information needed for tax purposes. 
This option is similar to the previous one, but it applies a threshold based on size, which is likely to result 
in lower costs (aggregated one-off and recurrent). These costs are expected to be close to the upper bound 
nevertheless. 
Total one-off costs estimate are likely to reach EUR 259 million (or EUR 1.5 million per CASP). The 
recurrent  costs  are  estimated  not  to  surpass  EUR  135  000  per  entity  on  a  yearly  basis.  The  hybrid 
reporting approach would ensure a balance between too detailed transactional information to be reported 
by all CASPs with EU users regardless of the size (Option 1), and the need for second round information 
requests (Option 3). 

39 The costs will likely benefit from the effects of the economy of scale: decreasing marginal costs, so that as more sellers are covered, the price 
per seller for setting up the system decreases. 

36 

 
 
 
 
 
 
 
                                                           
6 

This  option  is  similar  to  Option  5,  but  with  lower  costs  (one-off  and  recurrent)  due  to  the  exclusion 
criteria based on size, which reduces the number of reporting CASPs. These costs are expected to be 
close to the middle bound nevertheless. 

6.2.2.2 Impact on tax administrations and Commission 

The  estimated  costs  incurred  by  tax  administrations  and  the  European  Commission  are  largely 
dependent on the IT solution needed for the reporting by CASPs and the subsequent exchange of 
information  by tax administrations. These  have been quantified and the relevant  information  is 
available in Table 6 above and Annex 5. 

One-off costs by tax administrations in the EU-27 when processing crypto-asset transactions are 
estimated to range between EUR 500 000 and EUR 64.8 million or between EUR 18 000 and EUR 
2.4 million per tax administration on average, depending on the IT solution chosen. The estimated 
recurrent costs vary approximately between EUR 100 000 and EUR 6 million on a yearly basis, or 
between  EUR  3  700  and  EUR  220  000  on  average  per  Member  State.  These  estimates  are 
extrapolated  from  the  costs  incurred  by  Member  States  under  previous  editions  of  DAC.  They 
broadly aim at estimating costs for information on all crypto-assets in the EU. 

Furthermore, the type of reporting and scope under the various options, will also affect recurrent 
costs for tax administrations. These are qualitatively assessed, however, and summarised in the 
table below.  

Table 9 Assessment of costs per policy option (tax administrations) 

Option 

1 

2 

3 

4 

5 

Assessment 
The  transaction-by-transaction  reporting  would  bring  increased  costs  for  tax  administrations,  as  the 
information received would be much more voluminous, thus requiring more time to process. Compared 
to aggregate or hybrid reporting, transaction-by-transaction reporting is likely to be quite significant with 
respect to processing a much higher amount of untreated data, as all transactions by a single taxpayer 
would  have  to  be  made  available.  Therefore,  more  information  will  need  to  be  processed  by  tax 
authorities, with an impact on IT infrastructure needed. 
The potential issues remain the same as in Option 1, but the estimated costs (recurrent in particular) are 
likely to be lower, as there is a threshold on CASP size, meaning less data will be transmitted to the tax 
authorities. Reporting less data, however, might be problematic since even smaller CASPs can still have 
relatively large customer bases, which could lead to less tax income (this is also applicable to Options 4 
and 6). 
The data sent to the tax authorities by CASPs should contain aggregate information. While the volume 
of  information  is  likely  to  be  lower  than  under  Options  1  and  2,  the  tax  administrations  might  need 
additional  clarifications  leading  to  second  round  of  inquiries  to  the  CASPs.  However,  it  cannot  be 
precisely predicted how often will this occur, but the costs are still expected to be lesser than in previous 
two options.  
This option is similar to Option 3, but the estimated costs (recurrent in particular) are likely to be lower, 
as there is a threshold on CASP size, meaning less data will be transmitted to the tax authorities. 
This option encompasses hybrid reporting by the CASPs, which is the most cost efficient modality for 
the tax administrations. This is due to the fact that the data received is predominantly aggregated (i.e. no 
large data volumes to process) and detailed information is requested to the CASPs only when necessary 
(i.e. the need for the second round of information is being significantly reduced). 

37 

 
 
 
 
 
 
 
6 

This option is similar to Option 4, but the estimated costs (recurrent in particular) are likely to be lower, 
as there is a threshold on CASP size, meaning less data will be transmitted to the tax authorities. 

Besides tax administrations, the Commission would also bear costs. In any legislative option, on 
the basis of current and past experience, it is likely that the Commission would incur development 
costs for defining the common EU reporting specifications (i.e. the type of data to be reported, 
collected and exchanged), and for setting up new and/or adapting the existing IT systems to enable 
the exchange of information. Commission’s one-off costs could vary between EUR 500 000 and 
EUR 1.4 million. 

The recurrent costs for the European Commission are estimated to range between EUR 100 000 
and EUR 200 000 on a yearly basis, and mainly relate to operating and maintaining the IT system 
for  data  storage  and  exchange  relative  to  crypto-assets.  There  are  different  IT  solutions  for 
exchange of information available, which influence the costs range and are described in more detail 
in Annex 5. 

6.2.3.  Impact on sector’s competitiveness and SMEs 

The rapid digitalisation of the economy suggests that the economic role of CASPs as facilitators 
in  crypto-asset  transactions  is  becoming  increasingly  relevant.  The  users  engaging  in  such 
transactions  through  service  providers  appreciate  the  speed  of  exchanges,  availability  of  the 
amenities and anonymity.  

It  cannot  be  excluded  that  this  legislative  initiative  may  affect  the  competitiveness  of  certain 
service  providers  that,  in  a  baseline  scenario,  do  not  currently  have  any  reporting  obligations. 
Looking ahead, it is expected that reporting rules will however be put in place in more countries, 
even in the absence of a European initiative. The proposal aims at providing a single set of rules 
throughout the EU, thereby reducing the compliance burden at least for those operators that are 
active in various countries and subject to different rules. Introducing reporting rules could also 
affect the service providers’ customer base. The initiative could decrease the number of users that 
transact via the service providers, most likely from those users who want to avoid complying with 
their tax obligations. On the other hand, the initiative could increase the trust in the system and 
attract new users who appreciate reputational and trusted providers. This would positively affect 
the competitiveness of CASPs, and could compensate, in part, for the loss of the clients favouring 
unregulated environments. 

A level playing field requires all to be subject to the same rules, which makes the competition fair 
and efficient. That is, the available policy options do not differentiate between CASPs based on 
location,  meaning  all  service  providers  with  EU  users  will  have  to  report  and  face  the  same 
compliance costs. The EU initiative would also level the playing field within the EU as it would 
also prevent competitive disadvantages arising from possible differentiated reporting requirements 
across the Member States. In addition to ensuring fairness within the crypto-asset market, it would 
also  positively  affect  competition  with  respect  to  the  traditional  financial  institutions.  This  is 
because CASPs would be subject to reporting obligations like traditional financial institutions. 

38 

 
 
 
 
 
 
When CASPs are SMEs, they tend to face a relatively higher administrative burden when fulfilling 
tax requirements due to their relatively small size and limited resources. However, since most of 
the information that needs to be collected is already collected for AML/KYC purposes, it is largely 
available to CASPs for their daily operations. Furthermore, the crypto market matures relatively 
fast and so do the SMEs by becoming big players on the market (provided they enable transactions 
of high value increasing their turnover). Regardless  of the size, SMEs can still have large user 
bases  since  high  digitalisation  facilitates  the  management  and  processing  of  vast  volumes  of 
transactions. Impact on SMEs and competitiveness as per available policy options is qualitatively 
described in the table below. 

Table 10 Policy options impacting competitiveness and SMEs 

Option 

1 

2 

3 

4 

5 

6 

Assessment 
Common rules at EU level would be beneficial for competitiveness  of the Single Market as the level 
playing  field  between  the  countries  would  be  guaranteed,  thus  not  leaving  certain  business  in  a  less 
advantageous position. SMEs would not be carved out from the initiative, which would likely increase 
their  compliance  costs.  However,  transaction-by-transaction  reporting  is  less  cumbersome  for  SMEs 
compared to other reporting modalities. This would also exclude second round information requests by 
tax administrations (also applicable to Option 2).  
Competitiveness of the Single Market is expected to be worse off than in Option 1. Since SMEs would 
be considered out of scope, this would mean that potentially large user bases  they may have and their 
underlying transactions would not be reported. SMEs would avoid some administrative burden, which 
would be beneficial at first. Implementing the right reporting framework once they grow bigger might 
be more burdensome than having it in place from the beginning (this also applies to Options 4 and 6). 
Nevertheless, transaction-by transaction reporting would entail less administrative burden. 
Common rules at EU level would be beneficial for competitiveness  in the Single Market as the level 
playing  field  between  the  countries  would  be  guaranteed,  thus  not  leaving  certain  business  in  a  less 
advantageous position. SMEs would not be carved out from the initiative, which would likely increase 
their compliance costs (higher than under Option 1).This is due to aggregate reporting which is more 
cumbersome for SMEs compared to other reporting modalities. Second round information requests by 
tax administrations are also likely (applicable to Option 4). 
Competitiveness of the Single Market is expected to be worse off than in Option 3. Since SMEs would 
be considered out of scope, this  would  mean that  potentially large  user bases that they  would not be 
reported. If SMEs grow bigger over time, aggregate reporting would still bring about higher compliance 
costs than under Option 2. 
Common rules at EU level would be beneficial for competitiveness  of the Single Market as the level 
playing  field  between  the  countries  would  be  guaranteed,  thus  not  leaving  certain  business  in  a  less 
advantageous position. SMEs would not be carved out from the initiative. The hybrid reporting modality 
would  make  compliance  costs  relatively  manageable  (somewhere  in  between  Options  1  and  3),  with 
limited amount of second round information requests by tax administrations. 
Competitiveness of the Single Market is expected to be worse off than in Option  5. SMEs  would be 
carved out from the initiative. If they grow bigger over time, the hybrid reporting modality would make 
compliance costs relatively manageable (somewhere in between Options 2 and 4), with limited amount 
of second round information requests by tax administrations. 

6.2.4.  Social and environmental impacts 

Expanding  the  automatic  exchange  of  information  and  administrative  cooperation  would  yield 
positive social and environmental impacts. As discussed above, the proposal is expected to lead to 
an increase in tax revenues, which can be used to fund (green) economic and social policies of the 

39 

 
 
 
 
 
 
Member States. The initiative would also contribute to a positive perception of tax fairness and to 
fair  burden  sharing  across  taxpayers,  while  at  the  same  time  resulting  in  more  trust  and 
transparency from the side of the intermediaries.  

The  EU  would  be  directly  tackling  the  challenge  of  unreported  income  earned  through  service 
providers active in EU Member States. Tax evasion matters to a vast majority of the EU citizens.40 
The perception of tax fairness, together with the EU’s role in shaping it, is expected to improve 
with such an initiative. The same reasoning applies to benefits in terms of fair burden-sharing as 
the Member States would ensure that taxes due are effectively collected.  

The  total  environmental  effects  are  unclear  but  likely  to  be  minimal  given  that  the  proposed 
initiative  only  introduces  a  reporting  and  information  exchange  obligation  for  existing  players 
without provisioning, for example, the use of technology behind crypto-assets.  

Furthermore, the existing DAC includes specific provisions and safeguards on data protection in 
line with the GDPR. The reporting under previous iterations of the DAC concerns different types 
of  income,  financial  assets,  the  content  of  rulings  decided  by  the  tax  authorities,  reports  from 
multinationals, arrangements facilitated by intermediaries and income from transactions using on-
line platforms. The reporting in all of these categories has been considered to be in line with the 
provisions of the GDPR. Any legal initiative based on further amendments to this Directive will 
then continue to follow and respect these provisions and will have to comply with GDPR from the 
start. In terms of information reported, it is worthwhile noting that under this legislative proposal, 
reporting entities will be transmitting user/account details as well as information related to crypto-
assets  proceeds  and  holdings.  As  a  consequence,  crypto-asset  users  that  carry  out  transactions 
using CASPs will be subject to reporting of a number of basic points of information. This is the 
same situation as under the current provisions of the DAC, where persons investing in shares or 
saving in a bank account will be subject to the same kind of reporting. The information included 
typically covers information needed to identify the taxpayer (i.e. the Tax Identification Number(s), 
the first and last name of the user, the primary address of the user, the date of birth of the user) and 
then  specific  information  about  the  transaction.  The  information  will  be  made  available  to  the 
relevant tax administrations. 

Thus  far,  one  of  the  main  benefits  for  taxpayers  of  crypto-asset  exchanges  was  the  pseudo-
anonymity  of  its  users,  and  only  a  relatively  restricted  number  of  service  providers  have  been 
asking  for  taxpayers’  identification  numbers  (TIN)  upon  their  registration.41  TIN  information, 
together with information such as first names and surnames, are the most important data to ensure 
that the information exchanged can be used for the purpose of tax control.42 This information will 
be given to the tax administrations by CASPs. This does not mean that tax authorities will not be 
engaging in processes of their own to find taxpayers behind the transactions. 

40 “Tax fraud: 75% of Europeans want EU to do more to fight it”, European Parliament News, 29-07-2016. 
https://www.europarl.europa.eu/news/en/headlines/economy/20160707STO36204/tax-fraud-75-of-europeans-want-eu-to-do-more-to-fight-it  
41 Information obtained during the stakeholder consultation process. 
42 European Commission. (2018). Report from the Commission to the European Parliament and the Council on overview and assessment of the 
statistics and information on the automatic exchanges in the field of direct taxation COM(2018)844 final. 

40 

 
 
 
 
 
                                                           
From  the  public  perspective,  an  EU  legislative  proposal  would  also  lead  to  an  indisputable 
percentage of cost savings and public revenue gains due to the relevant information that will reach 
tax authorities. There would possibly be a better compliance effect stemming from taxpayers who 
know that tax authorities have access to the information related to their transactions with crypto-
assets.  

41 

 
 
 
 
 
 
7. HOW DO THE OPTIONS COMPARE? 

This  section  compares  the  impacts  of  the  available  options  (see  section  6.1).  The  options  are 
assessed against the criteria of effectiveness in reaching the policy objectives, efficiency (in terms 
of  costs  and  benefits)  as  well  as  coherence  with  other  EU  policies,  namely  GDPR.  For  each 
category, the options have been rated on a scale from minus three to plus three. The baseline is 
used  as  point  of  comparison,  and  it  is  scored  as  zero.  The  same  zero  mark  has  been  given  to 
categories that produce no effects whatsoever under the available options. Scores one, two and 
three  indicate  limited,  sizeable  and  strong  impacts43  respectively,  while  the  signs  (pluses  and 
minuses)  reflect  their  positive  or  negative  direction.  The  table  below  shows  the  summarised 
assessment and displays ranks between different options. 

Table 11 Comparison of options 

Baseline 
                                   Options                                                                         

Category               

Effectiveness of the options 
Consistent functioning of the internal market  
Safeguarding tax revenues in Member States and 
improving fairness of tax systems 
Improved ability of Member States to detect and 
counter tax fraud, evasion and avoidance 
Deterrent effects 
Efficiency of the options 

Impact on compliance costs for service providers 

Impact on enforcement costs for tax 
administrations 
Impact on tax collection 
Impact on SMEs 
Coherence with other EU policies 
Coherence with GDPR 

0 

0 

0 

0 

0 

0 

0 
0 

0 

1 

3 

2 

1 

3 

-2 

-3 

1 
-2 

2 

2 

2 

2 

1 

2 

-1 

-3 

1 
-1 

2 

3 

3 

2 

2 

3 

-3 

-2 

1 
-3 

2 

4 

2 

2 

2 

2 

-2 

-2 

1 
-1 

2 

5 

3 

3 

3 

3 

-3 

-1 

3 
-2 

2 

6 

2 

3 

2 

2 

-2 

-1 

2 
-1 

2 

As displayed in the above tables, all options would contribute to the safeguarding of tax revenues 
in the Member States. The available options also improve the effectiveness aspects by increasing 
the fairness and transparency of tax systems’, reducing cross-border tax evasion and improving 
the overall functioning of the internal market.  

Without a binding regulation on EU level, there is a risk that the functioning of the Internal Market 
is not ensured in the same way as in the presence of binding EU legislation. This is also the case 
when SMEs are being excluded (Options 2, 4 and 6) as there is an obvious lack of level playing 
field. 

The efficiency of different options varies since the type of reporting, as well as the application of 
a size threshold, affects CASPs and tax administrations oppositely (i.e. what is more costly for 
CASPs is more cost-saving for tax administrations and vice versa). In particular, providing a larger 

43 Estimated impacts may look at the amount, range or degree of a certain criteria. Limited indicates impacts that are not quite great, sizeable refers 
to ones that are large, considerable or substantial, while strong indicates extremely powerful impacts. 

42 

 
 
 
 
 
 
 
                                                           
amount of information to the tax administrations (Options 1 and 2) may result in more control and 
taxes, but the additional costs stemming from the excess of data possibly leading to overburdening 
may  not  outweigh  the  benefits.44  For  service  providers,  reporting  detailed  (transaction-by-
transaction) information is relatively easy with lesser costs since the data provided is raw, while 
data aggregation would require additional costs (Options 3 and 4). Hybrid reporting (Options 5 
and 6) provides for a middle-ground solution when it comes to bearing costs as it considers data 
aggregation (more work on the CASP side) while processing additionally requested raw data only 
when  relevant  (more  work  for  tax  administrations).  Size  thresholds  also  affects  costs  for  both 
CASPs  and  tax  administrations.  This  is  due  to  positive  correlation  between  the  two  variables 
(number of service providers needing to report and costs). 

The deterrent effect and tax collection are improved with more detailed information and with a 
wider scope. Reporting of information on transactions rather than balances will therefore have a 
stronger deterrent effect and will improve tax collection. The increased scope and the transactional 
reporting will also improve the ability to detect and counter tax fraud, evasion and avoidance as 
there  is  more  information  on  a  wider  scope  of  taxpayers.  In  the  end,  this  will  contribute  to 
safeguarding tax revenues and bolster the fairness of the tax system. 

To  sum  up,  all  options  share  certain  similarities  once  contrasted  with  the  baseline  scenario. 
Nevertheless,  larger  effectiveness  and  efficiency  gains  for  service  providers  and  tax 
administrations are obtainable under hybrid reporting and with no differentiation in terms of size.  

The  absence  of  a  threshold  would  mean  that  SMEs  face  an  administrative  burden,  which  is 
proportionately heavier than for larger CASPs. However, the fast evolution of the market and the 
participating entities’ growth pattern mean that CASPs can easily and quickly grow in size. As the 
market grows fast, they could within a very short time change from being out of scope to being in 
scope,  which  would  make  it  difficult  for  CASPs  to  collect  the  necessary  data  on  short  notice. 
Setting a threshold to  leave out  of scope CASPs  that have a more limited size is  therefore not 
necessarily  a  better  option  for  SMEs.  In  addition,  this  threshold  could  lead  to  a  non-desired 
fragmentation  of  the  market  and  imply  risks  of  not  detecting  transactions  that  are  potentially 
significant from a tax perspective.  

44 The granularity of information reported plays an important role when accounting for both benefits and costs. The more data is transmitted to tax 
administrations, the more transparency is provided, leading to a higher degree of discretion when shaping tax policies. At the same time, though, 
the authorities are likely to become overflown with data, which can likely decrease their ability to properly analyse the received information. 

43 

 
 
 
 
 
 
                                                           
8. PREFERRED OPTION 

The above analysis indicates that Option 5 hybrid reporting by all CASPs, irrespective of size, is 
the most appropriate option to meet the objectives of the initiative. The status quo baseline scenario 
is the least effective, efficient and coherent. When compared with the baseline scenario, having an 
EU mandatory common standard would ensure that all EU tax administrations have access to the 
same type of information. In other words, an EU legislative initiative would put all tax authorities 
on  an  equal  footing.  A  legislative  initiative  is  also  the  only  one  that  allows  for  the  automatic 
exchange of information at the EU level, based on common standards and specifications.  

The approach outlined under Option 5, once implemented, would allow the tax authorities where 
a  crypto-asset  user  is  a  resident  to  verify  that  the  user  has  accurately  reported  their  proceeds 
obtained  through  crypto-asset  transactions.  Besides,  it  would  positively  influence  sector 
competitiveness because it would level the playing field between actors of the traditional financial 
sector and crypto-assets, as well as bring a higher degree of tax fairness,  increasing trust in all 
sector players. 

This  proposal  would  design  a  legal  framework  to  report  and  exchange  tax-related  information 
efficiently, effectively, and securely.  

All  CASPs  regardless  of their size and location need to  collect  and report information  on their 
customers  that  are  resident  in  the  EU.  This  would  ensure  a  level  playing  field  in  the  Internal 
Market.  Moreover  all  CASPs  offering  their  services  to  EU  resident  users  would  have  to  be 
registered in the EU in accordance with the proposed Regulation on MiCA.  

This initiative would not set a threshold for reporting obligations to apply, which would reduce the 
risk of creating loopholes and contribute to creating a level playing field in the global crypto-asset 
market. CASPs already need to gather information for AML/KYC purposes hence they are already 
obliged  to  identify  their  customers.  The  administrative  burden  linked  to  data  collection  would 
therefore remain limited for service providers.  

Concerning the scope in terms of crypto-assets, the preferred option would aim at setting rules for 
the exchange of information concerning marketable crypto-assets.  

Concerning the transmission and reporting of information for crypto-assets, the preferred option 
would be a middle-ground between aggregate reporting and transaction-by-transaction reporting. 
Some  additional  data  such  as  number  of  transactions  or  any  commissions  or  fees,  would  be 
collected as well in order to enable a faster, more accurate and effective tax assessment by tax 
authorities. This system would allow tax administrations to enhance the usability of the data and 
increase the efficiency of implementing risk analysis for tax purposes. For two types of crypto-
assets, CBDCs and e-money tokens CASPs would exchange information on balances and not on 
transactions, under similar conditions to those that apply to financial assets. The IT solution that 
would  best  facilitate  reporting  and  exchange  of  information  with  the  best  available  balance 
between costs and usability benefits for all parties involved – CASPs, the Member States and the 
Commission  –  is  the  one  of  Central  Directory  (already  used  for  exchanges  under  DAC3  and 
DAC6). 

44 

 
 
 
 
 
The preferred option would be proportionate and would not go beyond what is needed to achieve 
the goals.  The data that crypto-asset service providers would need to  provide, according to  the 
experience with previous DACs, is the minimum required to ensure that tax administrations can 
adequately execute their tax control commitments. The cost-benefit ratio is positive: the expected 
return  in  terms  of  additional  tax  revenues  is  higher  than  the  estimated  costs.  While  there  is  an 
administrative burden for businesses and tax administrations linked to the proposed initiative, it is 
less burdensome than having a patchwork of national rules. The impact on personal data protection 
is in line with data protection rules, and the expected effect on the sector’s competitiveness and 
the overall social impact is deemed positive. 

Concerning  the  administrative  costs  related  to  the  ‘one  in,  one  out’  approach,  there  will  be 
administrative costs for crypto-assets service providers. The total one-off costs for crypto-assets 
service  providers  are  estimated  at  EUR  259  million  (or  EUR  1.5  million  per  CASP)  while  the 
recurrent costs are estimated at 22.6 million for all CASPs but it is estimated that they will not 
surpass EUR 135 000 per entity on a yearly basis. However, as a result of the directive crypto-
assets service providers will benefit from homogeneous reporting requirements throughout the EU, 
rather  than  having  multiple  standards  across  each  Member  State.  They  will  not  be  faced  with 
burdensome individual information requests as the preferred option provides tax administrations 
with the right level of information and the process to report the information will be very much 
automated and digitalised. 

It  would  also  respect  the  principle  of  subsidiarity,  as  the  main  problem  –  which  is  that  tax 
authorities lack the information necessary to monitor the income obtained using crypto-assets – 
requires EU solutions, providing new tools to enable tax administrations to do their job efficiently. 
In the  absence of  administrative  cooperation, a  Member State on its own would not  be able to 
ensure the correct compliance of its residents. Therefore, the possibility for tax authorities to obtain 
the necessary information clearly offers EU added-value, over and above what can be achieved at 
the individual Member State level. 

45 

 
 
 
 
 
 
 
 
 
9. HOW WILL ACTUAL IMPACTS BE MONITORED AND 
EVALUATED?  

9.1 Indicators for monitoring and evaluation 

The table below gives an overview of the objectives, the indicators to measure whether they will 
be achieved, the tool for monitoring them and the operational objective. In the medium term, the 
initiative is expected to have a positive impact with respect to the general objectives presented in 
chapter 4. 

Table 12 Indicators for monitoring 

Specific objectives 
Improve  the  ability  of  Member 
States  to  detect  and  contrast 
cross-border tax evasion  

Indicators 
Number  of  controls  carried  out 
based on data tax administrations 
gather  via  the  initiative  (either 
only or including these data)  

Measurement tools 
Yearly  assessment  of  automatic 
exchange of information (source: 
tax 
Member 
administrations) 

States’ 

Additional  tax  revenues  secured 
thanks to the initiative, measured 
either  as  increase  in  tax  base 
and/or increase in tax assessed  

Yearly  assessment  of  automatic 
exchange of information (source: 
Member 
tax 
administrations)  

States’ 

the  deterrent  effect 
Improve 
through the reporting obligations 
and subsequent risk of detection.   

Qualitative assessment of the rate 
of 
users’ 
compliance. 

crypto-asset 

Yearly  assessment  of  automatic 
exchange of information (source: 
Member 
tax 
administrations)  

States’ 

9.2. Monitoring and reporting 

The results of the yearly assessment by Member States are presented and discussed in the Expert 
Group on Administrative Cooperation in Direct Taxation Commission. The yearly assessment is 
conducted on the basis of the relevant provisions of the DAC and its implementing regulation. 

As the implementation of the initiative is likely to start after 2022, the Commission will report on 
this  initiative  as  part  of  the  third  report  to  the  European  Parliament  and  the  Council  on  the 
effectiveness and efficiency of the application of the DAC, currently due by 1 January 2028.45 

The initiative's overall success would mean Member States’ tax authorities obtain the necessary 
information to complete one of their core missions, which is to efficiently control and assess the 
correctness  of  taxpayers'  income  tax  returns.  In  other  words,  it  would  improve  the  ability  of 
Member  States  to  detect  and  address  cross-border  tax  fraud,  tax  evasion  and  tax  avoidance. 
Currently, tax authorities lack the necessary information to control the correctness of the capital 
gains  resulting  from  crypto-assets  declared.  Success  would  also  mean  that  taxpayers  would  be 

45 The first report on the application of the DAC was due by 1 January 2018. Report from the Commission to the European Parliament and the 
Council on the application of Council Directive (EU) 2011/16/EU on administrative cooperation in the field of direct taxation. COM/2017/0781 
final. The second report is due by 2023. 

46 

 
 
 
 
 
 
 
 
 
                                                           
deterred from non-complying with their tax obligation, would change their behaviour and correctly 
report their income. 

The data used to measure the success of this initiative, such as the number of controls carried out 
based  on  data  tax  administrations  gather  via  the  initiative,  the  additional  tax  revenues  secured 
thanks  to  the  initiative  or  the  rate  of  compliance,  are  collected  mainly  through  the  yearly 
assessment of the automatic exchange of information. Based on existing provisions of DAC, each 
Member  State  has  to  complete  annually  a  questionnaire  (“the  DAC  yearly  assessment”)  by 
providing  information  on  the  effectiveness  of  the  automatic  exchange  of  information  and  the 
practical results. This questionnaire will be expanded to include this initiative. Similarly to what 
exists for other provisions of DAC, the Commission will determine, by means of an implementing 
regulation, a list of statistical data which shall be provided by the Member States for the purposes 
of the evaluation of this initiative. In particular, the outcome of a Fiscalis Working Group on Key 
Performance Indicators for DAC will be used in order to improve indicators and controls of the 
performance of the initiative. This would measure for instance the number of times information 
received is used as part of a compliance intervention and the number of times the tax base of a 
taxpayer is adjusted as a result of received information. 

47 

 
 
 
 
 
 
 
ANNEX 1:  PROCEDURAL INFORMATION 

DG TAXUD, PLAN/2020/8658.  

The  initiative  is  part  of  the  Action  plan  for  fair  and  simple  taxation  supporting  the  recovery 
strategy46 and listed in the Commission Work Program 2021, Annex I, priority: “An economy that 
works for people”, initiative number 15. 

Organisation and timing  

An inter-service steering group was set up to steer and provide input to this impact assessment 
report. The steering group met 3 times before the report was submitted to the Regulatory Scrutiny 
Board. 

Consultation of the Regulatory Scrutiny Board  

On 11 October 2021, a draft version of the impact assessment was presented to the Regulatory 
Scrutiny  Board.  On  12  November  2021,  the  RSB  issued  a  positive  opinion  with  reservations. 
Afterwards, the draft report has been revised in order to take into account the recommendations 
for improvement, as explained in more detail in the table below. 

How have the recommendations led to 
changes to the report? 
Further definitions have been added in 
chapter 5. 

Explanations have been developed further in 
Chapter 2 and annex 6 has been added. 

RSB recommendations 

The report should define in more depth the 
different types of crypto-assets, and clarify  
which types are in and out of scope for this 
initiative. This is particularly relevant as  
regards utility tokens and non-marketable 
crypto-assets. In addition, the report should  
provide a more detailed definition on crypto-
asset service providers (CASPs) in scope. 
The report should clarify what legislative 
gaps it aims to fill. It should better explain  
how overlaps will be avoided with the 
ongoing AML Directive and how it will build 
on the MiCA initiative. It should describe in 
more detail how this initiative will build on 
and interact with the evolving measures 
emerging from the OECD discussions. It 
should clearly explain how this initiative will 
ensure compatibility and avoid duplication,  

46 European Commission. (2020). Communication from the Commission to the European Parliament and the Council, An action plan for fair and 
simple taxation supporting the recovery strategy. 

48 

 
 
 
 
 
 
 
 
 
                                                           
 
including by recalling the standard practice to 
bring OECD agreements into EU law  
through directives. The report should also 
more explicitly describe the changes referred 
to as ‘fine-tuning’, clarifying their content 
and impact as well as to what extent there 
remains any policy choice. 
The report should outline and discuss all 
feasible options, realistic combinations of  
measures and discarded options. Based on the 
clarification of the crypto-assets in scope, it  
should present the options in a way that their 
differences, for instance in terms of measures  
included, can be effectively assessed and 
compared with each other. The report should  
present the precise content of some options as 
regards SME thresholds and aggregated  
reporting forms. It should systematically 
consider suitable exemptions or lighter 
regimes for SMEs, or explain why these are 
not appropriate under all options. It should 
explain how ‘future-proof’ the options are. It 
should describe how the proposed IT 
solutions are applicable to the different 
options. 
The report should better explain the evidence 
underpinning the cost and benefit  
estimates, as well as the robustness of the 
underlying assumptions and the reliability of 
the data used. It should assess the risk that the 
estimated costs and benefits may not  
materialise. It should undertake a sensitivity 
analysis on a uniform 25% tax rate used for  
the additional tax revenue estimates to reflect 
the variety of tax rates across Member  
States. 
When assessing the impacts of the different 
options, the report should account for the  
costs of second-round requests by tax 
administrations, both for tax administrations 
and service providers. It should discuss how 
the different types of reporting affects the  
effectiveness and efficiency of collecting 
information on crypto-assets for tax purposes.  
The report should also integrate the impact 
analysis of the options on the IT system. 

The options have been re-worked for 
increased clarity in Chapter 5. SME 
thresholds are discussed. The different IT 
solutions are analysed further in Annex 5. 

The evidence and the robustness of 
assumptions has been explained further in 
Chapter 6. A sensitivity analysis of the tax 
rate used has also been carried out. 

Further explanations and clarifications are 
provided in Chapter 6 and Annexes 3 and 4. 

49 

 
 
 
 
 
Further descriptions of the market and the 
assets and actors has been added. The 
potential effects on SMEs have been 
elaborated further in Chapters 5 and 6. 

A description of what success should look 
like as well as of how to measure results has 
been added to chapter 9. 

Further details on consultations have been 
added to Annex 2. 

The report should provide a better overview 
of the size and role of different market  
actors on the EU crypto-asset market, in 
particular with respect to third-country 
players and European SMEs. It should better 
describe the market dynamics and assess the 
impacts of the options on the competitiveness 
of SMEs. It should better explain how 
proportionate the estimated costs are for 
SMEs and whether these may prevent the 
market entry of innovative EU start-ups. 
The description of the objectives as well as 
the future monitoring framework should  
better reflect what success would look like. 
The report should also better describe how 
the data collection and the indicators used 
will ensure that success can be measured. It 
should explain the role that the envisaged 
implementing measures will play in this 
regard. 
The report should better engage with the 
different stakeholder views in the main  
analysis. It should more clearly outline the 
different views from the main stakeholder  
groups such as Member States, CASPs 
(including SMEs) and tax administrations. 

Evidence, sources and consultations 

The evidence for the impact assessment report was gathered through various activities and from 
different sources:  

  Consultation with the Working Party IV Commission Expert group on direct taxation 
  Targeted consultation with relevant stakeholders, such as business associations and leading 

corporations in the global market 

  Targeted consultation addressed to tax authorities on the problems covered by the initiative 

and possible solutions  

  Public consultation  
  Feedback on the inception impact assessment  
  Joint Research Centre (JRC) study47: Crypto-currencies – An empirical view from a tax 

perspective 
  Desk research  

47 See Footnote 16 

50 

 
 
 
 
 
 
 
 
                                                           
ANNEX 2:  STAKEHOLDER CONSULTATION 

I. 

Introduction 

For  the  preparation  of  this  initiative,  the  European  Commission  designed  a  stakeholder’s 
consultation strategy, which is summarized in this synopsis report. The aim of the synopsis report 
is to present the outcome of the consultation activities and to show how the input has been taken 
into account.  

The consultation strategy encompasses both, public and targeted consultations. Further details are 
provided in the table below:  

Table 2 Overview of consultation activities 

Methods of 
consultation 
Inception 
(feedback mechanism) 

Impact  Assessment 

Targeted 
Consultation 

Working 
Party on 
Taxation 

Stakeholder group 

Academic/research 
institution 
Business association 
Company  
EU citizen 
Non-EU citizen 
Trade Union 
Public authorities 

Consultation 
period  
23 Nov. 2020 – 
21 Dec. 2020 

13 Nov. 2020 

Public authorities 

24 Mar. 2021 

Working 
Party on 
Taxation 

Business involved 

23 Mar. 2021 

Private 
Stakeholder’s 
meetings 

Public Consultation 

10 Mar. – 2 Jun 
2021 

Academic/research 
institution 
Business association 
Company  

51 

Objective/Scope of 
consultation 
Collect feedback on 
the Inception Impact 
Assessment 
outlining  the  initial 
the 
structure 
project.  

of 

Investigate the need 
for EU action. 
Gather  views  on  a 
possible 
EU 
initiative. 
possible 
Define 
scope  of  an  EU 
initiative. 
Investigate the need 
for EU action. 
Gather  views  on  a 
possible 
EU 
initiative. 
possible 
Define 
scope  of  an  EU 
initiative.  
Gather  experience 
service 
from 
providers  on  their 
current 
reporting 
requirements. 
Gather  views  on  a 
possible 
EU 
initiative. 
Ascertain  the  views 
of  a  broad  range  of 
stakeholders  mainly 
on  the  added  value 

 
 
 
 
 
 
 
 
EU citizen  
Non-EU citizen  
Trade union  
NGOs 

of a European action 
the  potential 
and 
scope 
the 
initiative  

of 

The different objectives of the different consultations were to: 

-  Provide stakeholders and the wider public with the opportunity to express their views on 

all relevant elements.  

-  Gather specialised input to support the analysis of the impact of the initiative.  
-  Contribute to the design of the technical aspects of the future initiative.  
-  Satisfy transparency principles and help to define priorities for the future initiative.  

As  reflected  above  by  the  different  methods  of  consultation  used  and  the  stakeholders’  groups 
consulted,  the  stakeholder  consultation  strategy  has  formed  an  integral  part  of  the  policy 
development process. The consultation began with the launch of the Inception Impact Assessment 
published on 23 November 2020 and continued until 2 June 2021 when the Public Consultation 
ended. 

Consultation participation 

II. 
1.  Feedback on the Inception Impact Assessment 

The consultation period through this feedback mechanism took place between 23 November and 
21 December 2020 via the Commission website48. The period started when the Inception Impact 
Assessment was published outlining the initial structure and options of the project. Nine comments 
were  submitted  during  this  consultation  period  by  individuals,  service  providers  and  umbrella 
organisations for the crypto/e-money sectors. 

2.  Targeted consultation 
2.1. Targeted consultation via an expert group (Working Party IV) 

The Working Party IV met on two occasions on 13 November 2020 and 24 March 2021 in order 
to discuss the future possible amendments to DAC.A draft concept paper “Possible expansion of 
the  exchange  of  information  framework  in  the  field  of  taxation  to  include  crypto-assets  and  e-
money”  prepared  by  TAXUD  D2  on  crypto-assets  and  e-money  was  discussed.  Participating 
Member States took the floor and expressed their support for an expansion of the existing DAC to 
encompass the sharing of information reported on crypto-assets and e-money. However, Member 
States emphasised the importance of closely following the work of the OECD on the same subject 
in order to avoid two different reporting frameworks.  

In order to complement the discussions with the Member States, a questionnaire, which was based 
on the draft concept paper and issues that were raised during the November 2020 meeting, was 
circulated to the Member States for input.  

48 https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12632-Tax-fraud-evasion-strengthening-rules-on-administrative-
cooperation-and-expanding-the-exchange-of-information_en 

52 

 
 
 
 
 
 
 
                                                           
 
2.2.Targeted consultation via private stakeholders’ meeting 

On 23 March 2021, a meeting with six representatives of different service providers and delegates 
of 24 Member States (BE, BG, DK, DE, EE, IE, EL, ES, HR, IT, CY, LV, LT, LU, HU, MT, NL, AT, 
PL, RO, SI, SK, FI, SE) was held virtually. Large as well as small service providers active in different 
sectors  were  represented:  crypto-asset  exchanges,  other  types  of  CASPS  and  digital  assets 
associations.  

The objective of the meeting was to gather views from stakeholders on their current experience 
with respect to reporting requirements based on national provisions, as well as to gather their views 
on  a  possible  EU  initiative  to  provide  tax  administrations  with  information  on  taxpayers  who 
generate  income  and  revenues  through  crypto-assets  and  e-money.  Ahead  of  the  meeting,  a 
questionnaire was issued.  

3.  Public Consultation 

The  public  consultation  was  launched  on  10  March  2021.  It  remained  open  until  2  June  2021 
respecting the usual 12 weeks limit. 

In addition to the general identification questions, the public consultation questionnaire consisted 
of  36  questions  which  covered  all  elements  of  the  impact  assessment;  problem,  subsidiarity, 
options and impacts of the initiative. Stakeholders could also upload additional contributions. In 
order  to  increase  the  visibility  of  the  public  consultation,  the  Commission  promoted  this 
consultation on social media. Despite the diversity of channels used, the number of contributions 
received remained small. Such a limited response to the public consultation could be explained by 
the rather widespread support and non-contentious character of the initiative at stake or the still 
small but growing market.  

In total, 33 responses were received, coming from the following respondents: 

Annex figure 1: categories of stakeholders commenting on the public consultation 

53 

 
 
 
 
 
  
 
 
Source: responses to the public consultation questionnaire 

In terms of breakdown by country of origin of the respondents, the chart below shows a diverse 
representation: 

Annex figure 2: Stakeholder’s origin country 

Source: responses to the public consultation questionnaire 

With regard to the publication of privacy settings, 2 respondents agreed to the publication of their 
personal details and 31 answered as anonymous participants. From the point of view of the size of 
the organizations involved, 7 are micro (1 to 9 employees), 4 small (10 to 49 employees), 4 medium 
(50 to 249 employees) and 8 large (more than 250 employees). 

From  the  replies  received,  at  least  7  of  them  acknowledged  using  crypto-assets  for  investment 
and/or payment purposes. 

Twelve position papers were submitted by stakeholders in addition to the answers provided by 
them  to  the  standardized  questionnaire.  Position  papers  were  submitted,  mainly,  by  business 
associations. 

III.  Methodology and tools for processing the data 

The consultation activities allowed for the collection of data of both qualitative and quantitative 
nature,  which  were  processed  and  analysed  systematically.  Qualitative  data  was  structured 
according to key themes. Quantitative data (including survey responses and figures provided by 
stakeholders) was processed using an Excel spreadsheet, and analysed using statistical methods, 
ensuring  the  appropriate  protection  of  personal  data  without  publishing  the  information  of  the 
respondents that did not provide their consent. 

54 

 
 
 
 
 
 
 
 
 
  
IV.  Consultation result  
1.  Inception Impact Assessment feedback 

Overall, the initiative to create a common EU framework for reporting obligations was welcomed 
by  the  majority  of  stakeholders  involved.  Several  comments  concerned  the  need  for  clearly 
defining crypto-assets and e-money, as well as the service providers in scope of the amendment to 
the  DAC.  Most  agreed  that  MiCA’s  definitional  framework  should  be  used  as  starting  point. 
Furthermore,  stakeholders  pointed  out  the  need  for  aligning  any  action  with  the  ongoing  work 
being undertaken by the OECD and the FATF on the regulation of cryptocurrencies. 

Some stakeholders insisted on keeping the global approach - “combat tax evasion by taxpayers 
seeking to hide their assets in offshore accounts and at the same time ensures a global level playing 
field”.  It  was  highlighted  that  the  principles  of  subsidiarity  and  proportionality  should  be  the 
drivers when scoping out the amendments to the DAC. 

There  was  widespread  agreement  on  the  need  for  providing  a  harmonized,  fair  and  robust  tax 
system. While a precise and targeted regulation is needed to address illicit activity, it is important 
that such a regulation is  proportional and not prohibitively complex to adversely affect crypto-
assets as an important component of the financial services industry. 

2.  Targeted consultation 
2.1 Targeted consultation via expert group (Working Party IV)49 

The expert group of Working Party IV met in November 2020, where the European Commission 
presented for the first time the proposal to expand the scope of the DAC to include crypto-assets 
and e-money. The corresponding concept note on expanding the scope of automatic exchange of 
information to crypto-assets and e-money was presented and discussed with the Member States 
during this meeting.  

In general, Member States expressed strong support for the expansion of the scope of automatic 
exchange of information to include crypto-assets and e-money. Questions raised by the Member 
States mostly revolved around the level of detail of such reporting, the extent of such reporting (in 
terms of assets covered, intermediaries covered, etc.) or the consistency with the OECD work in 
this area.  

The transfers from one wallet to another wallet held by the same taxpayer was seen as the only 
valid exemption. Another aspect raised was the consideration of data protection in case of reporting 
on  transaction-by-transaction  basis.  In  this  context,  some  Member  States  highlighted  that  an 
aggregate approach would be easier to reconcile with GDPR obligations. 

The  questionnaire  circulated  to  Member  States  consisted  of  questions  about  the  treatment  of 
crypto-assets and e-money as well as their tax treatment in each specific Member State. Regarding 
the  treatment  of  e-money,  Member  States  agreed  that  e-money  providers  just  like  financial 
institutions must determine whether they are a reporting Financial Institution according to DAC2. 

49 Information on this Commission expert group is available at:  
https://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail&groupID=953&NewSearch=1&NewSearch=1 

55 

 
 
 
 
 
                                                           
   
Thus, most Member States apply the CRS related FAQs to E-money providers. In terms of crypto-
assets, the outcome of the questionnaire showed that most Member States have not  introduced 
specific  provisions  for  crypto-assets  and  even  those  who  have  find  it  difficult  to  obtain  the 
necessary information for taxation based on their national legislation. 

Member States considered that the expansion of the scope of reportable information under DAC2 
may not be entirely sufficient and as such should be adapted for crypto-assets.    

Stakeholders expressed a preference to exchange the information on an aggregate basis. Similarly, 
most of the Member States were in favour of aggregate reporting as a basis for carrying out risk 
assessments although some still expressed their preference for transaction-by-transaction reporting 
for  the  purpose  of  tax  assessments.  Furthermore,  Member  States  discussed  the  possibility  of 
obliging CASPs to report more than once a year or to adapt the standard to the reporting entities 
or reported taxpayers.  

Member States expressed the need for considering the MiCA and AML proposals for extending 
the scope of the DAC. Some Member States consider that the provisions in these proposals may 
offer possibilities for the enforcement of reporting obligations for third country CASPs. Regarding 
cold wallets, Member States agreed that it would be difficult to cover them due to the difficulties 
in having information on crypto-assets held but not exchanged. 

As a summary of both meetings, the Member States agreed on the need to expand the scope of 
automatic exchange of information to crypto-assets. In addition, the reporting framework including 
aggregate versus transaction-by-transaction and the reporting frequency remained as open issues.  

2.2 Targeted consultation via stakeholder’s meeting 

On the topic of the crypto-assets in scope, stakeholders highlighted that important discussions on 
definitions are still ongoing on MiCA and AML. Therefore, the majority of stakeholders signaled 
the need to  follow existing provisions  from  MiCA and AML, as well as  the work done by the 
OECD on cryptocurrencies. Some stakeholders consider crypto-assets to be similar to financial 
assets and even money. Therefore, this initiative should only target crypto-assets that are admitted 
to trading. This is also due to the fact, as stakeholders unanimously say, that information on peer-
to-peer transactions cannot be easily obtained through private or cold wallets.  

There  was  a  general  consensus  on  the  need  to  maintain  a  level  playing  field  with  traditional 
financial  institutions  subject  to  DAC2  reporting  obligations  and  thus  to  avoid  unnecessary 
administrative burdens. There was unanimous support for the view that keeping it simple will help 
to define a successful reporting standard. 

On  the  reporting,  stakeholders  supported  the  idea  of  reporting  aggregate  data  rather  than 
transaction-by-transaction. According to the stakeholders, it is more appropriate from the IT point 
of view as there may be an excessive volume of transactional data to be reported. In this regard, 
the objective should be the targeting of tax evasion and not the collection of mass data that cannot 
be processed. Consequently, stakeholders also proposed the introduction of a reporting threshold 
in order to reduce the administrative burden. 

56 

 
 
 
 
 
 
 
Based on the AML/KYC due diligence procedures, stakeholders also confirmed that they could 
track information by jurisdiction. 

In summary, stakeholders and Member States agreed that the expansion of the scope of automatic 
exchange of information to crypto-assets would increase legal certainty resulting in benefits for 
stakeholders and tax administrations. Tax administrations will obtain the ability to increase tax 
revenues and stakeholders may achieve a better-regulated market. 

3.  Public Consultation 

A concerted effort was made to ensure that the views and concerns of all affected stakeholders 
were carefully considered throughout the impact assessment exercise.  

Overall, there has been strong support to lay down a single set of rules across the EU for CASPs, 
e-money service providers and other financial institutions operating with crypto-assets and to have 
the same reporting obligations for tax purposes throughout the EU (18 affirmative responses out 
of 33 – 11 no answers).  The reason might be that most of the respondents consider that common 
reporting  obligations  in  the  EU  would  reduce  the  administrative  burden  for  service  providers 
and/or  users,  while,  at  the  same  time,  ensuring  a  level  playing  field  with  traditional  service 
providers (19 out of 33 confirm this statement – 12 no answers).  

In relation to the perception of the problem, 11 respondents from different categories and also sizes 
of  stakeholders  (be  it  EU  citizens,  business  associations,  trade  unions,  companies/business 
organisations or non-governmental organisations between micro and large of size)   confirmed that 
there is significant lack of reporting for tax purposes of revenues obtained through crypto-assets. 
Only six disagree and five neither agree nor disagree with this statement. Thirteen respondents of 
different categories and sizes of stakeholders agree that the lack of tax revenues obtained through 
crypto-asset investments negatively impacts fair competition between the traditional and crypto-
asset  economy,  whereas 6 EU  citizens disagree  strongly  with  this  statement. Two  respondents 
neither agree nor disagree.  It seems that this problem comes from the fact that individual Member 
States are insufficiently equipped to track revenues generated through crypto-assets as pointed out 
by 13 respondents.  

The conclusion is that there is support for an EU action.  

When it comes to introducing harmonised reporting obligations for tax purposes, respondents are 
of the opinion that the main challenges are the cost of implementation, the complexity of handling 
and  migrating  existing  accounts  and  the  achievement  of  a  level  playing  field  in  the  EU. 
Furthermore, disadvantages for EU companies on a global level need to be avoided. A harmonised 
reporting  framework  may  result  in  operations  re-locating  out  of  the  EU  to  jurisdictions  where 
reporting is not mandatory. Another challenge for harmonised reporting obligations is the issue of 
double  reporting  where  the  same  information  is  already  collected  and  exchanged  under  other 
legislation. Ensuring an accurate, transparent and efficient identification mechanism on the crypto-
asset  and  e-money  service  providers,  as  well  as  the  financial  institutions  involved  in  these 

57 

 
 
 
 
 
 
 
 
transactions will not be an easy task. Finally, the decentralized nature of cryptocurrencies makes 
it almost impossible to capture all cryptocurrencies within an EU reporting framework. 

In relation to the entities in scope of a crypto-asset reporting framework, 14 respondents of which 
28% were EU citizens and the rest divided between the different categories, deem that all entities 
providing services in the crypto-asset field should be subject to reporting obligations in order to 
avoid potential loopholes. Only four respondents (two EU citizens, one large business organization 
and one business association) would allow some exemptions. 13 provided no answer. 

With  regard  to  entities  that  could  benefit  from  a  reporting  exemption,  respondents  indicated 
providers  primarily  concerned  with  enabling  the  use  of  blockchain  without  direct  links  to 
marketplaces,  such  as  custodial  wallet  providers  without  an  investment  focus,  tax  reporting 
services, account software, and portfolio tracking applications as well as small companies. 

In  relation  to  crypto-asset  operations  in  scope  of  reporting,  10  respondents  from  different 
categories  and  sizes  of  stakeholder  deem  that  all  crypto-asset  operations  should  be  reported  in 
order to avoid potential loopholes, whereas some respondents (three EU citizens, three business 
associations and one business organization) indicated supporting some exemptions from reporting.  
11 contributors did not provide an answer. 

Annex figure 3: Public consultation results – respondents’ opinions on main policy options 

58 

 
 
 
 
 
 
Source: responses to the public consultation questionnaire 

V. 

Conclusion 

The results of the public and targeted consultations allowed the European Commission to collect 
a number of views and opinions on the initiative.  

Both public and targeted consultations showed wide agreement about the existence of the problems 
identified in the impact assessment: no reporting of income and revenues earned through crypto-
assets.  

Regarding  the  reporting  of  information  on  crypto-asset  users,  a  broad  majority  of  stakeholders 
(Member States, private entities and EU citizens) agreed on the need for a European framework 
for  reporting  obligations  in  favour  of  achieving  a  sound  level  playing  field  and  a  true  internal 
market.  

As  a  conclusion,  during  the  different  consultations, neither  stakeholders  nor  Member  States 
questioned the need of a reporting framework. In general, there was a unanimous consent in going 
forward with a legal proposal. The main point of divergence was on the type and granularity of 
reporting.  

Finally,  it  is  worth  noting  that  the  feedback  received  throughout  the  public  and  the  targeted 
consultations has been used to inform the choice of the preferred policy options. 

59 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 3:  WHO IS AFFECTED AND HOW? 

1.  Practical implications of the initiative 

Under the preferred option, the initiative is meant to provide a legal basis at the EU level for setting 
up a reporting and exchange system that will allow (i) CASPs to collect and transmit periodically 
(once a year) to the tax administrations aggregate tax relevant information on its users and their 
underlying  transactions  and,  (ii)  tax  administrations  to  then  exchange  the  reported  information 
with relevant Member States, in order to use it for the administration and enforcement of relevant 
tax laws (e.g. tax code on personal income). 

Due  to  the  existence  of  other  EU  initiatives  relative  to  crypto-assets,  in  particular  the  MiCA 
Regulation and AML Package (i.e. Transfers of Funds Regulation), the estimated costs for DAC8 
should be considered upper bound as there could be commonalities already taken into account in 
the estimations of those other initiatives. Furthermore, these figures took into account the volatility 
of  the  crypto-assets  market  as  well  as  cost-savings  stemming  from  the  harmonisation  of  legal 
requirements.   

2.  Summary of costs and benefits  

I. Overview of Benefits (total for all provisions) – Preferred option 5 – Hybrid reporting by all CASPs 
Comments 
Amount 

Description 

Crypto-assets users – More 
tax transparency will result 
in increasing legal certainty 
and a fairer taxation of the 
revenues and income earned 
on crypto-assets.  

Tax administrations – 
Gaining access to the 
relevant information will 
enable tax administrations 
to ensure that taxes due are 
paid (e.g. improved risk 
analysis and accuracy of tax 
audits).  

No quantification available.  

Direct benefits 

Direct benefits in terms of additional tax 
revenues could reach EUR 2.4 billion. The 
hybrid reporting approach (preferred option) 
would ensure a balance between too detailed 
transactional information to be reported by all 
CASPs with EU users regardless of the size, and 
the need for second round information requests. 

Crypto-assets service 
providers 

No quantification available. 

Crypto-assets users will benefit of a more 
transparent crypto-assets market. Some tax 
authorities may even be able to pre-fill tax 
income statements making easier for the 
users to comply with their tax duties.   

Tax administrations will benefit from the 
reporting and exchange of information, 
which they can use to ensure that taxes dues 
are paid. The extent of the benefits will 
depend on how adequate Member States’ 
internal systems are to utilise such data. 
Benefits will also depend on the 
profitability and size of the crypto-assets 
market. Periods of intense growth of the 
market will translate into more public 
revenue that will be transparently reported.  

There will be benefits derived from having 
homogeneous reporting requirements 
throughout the EU, rather than having 
multiple standards across each Member 
States. This would make it easier to comply 
with existing tax rules and would improve 
compliance. Providers will not be faced 
with burdensome individualised 
information requests that would be needed 

60 

 
 
 
 
 
 
Member States – macro-
economic impact 

Indirect benefits 

The increase in tax revenues stemming from 
greater transparency will indirectly benefit the 
economy as a whole as it will provide revenues 
to fund Member States’ economic and social 
policies,  

Crypto-assets users   

No quantification available 

Crypto-assets service 
providers -  

No quantification available 

by tax authorities to make their 
control/checks in the absence of automatic 
reporting. 

Improvement in the perception of tax 
fairness, resulting from taxpayers paying 
their fair share in all Member States 
equally. 

Greater transparency and standardisation of 
rules will increase the trust in the system 
and could even attract new users who 
appreciate reputational and trusted 
providers. 

(direct/indirect) 

Administrative cost savings related to the ‘one in, one out’ approach* 

There will be a decrease in costs for crypto-
assets service providers due to homogeneous 
compliance requirements throughout the EU, 
rather than having multiple standards across 
each Member State.  However, there is no 
quantification available.  

Crypto-assets service providers will also benefit 
from not to being in a situation where there is 
need to answer a multitude of individual 
information requests from tax authorities.  

(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the impact of 
individual actions/obligations of the preferred option are aggregated together); (2) Please indicate which 
stakeholder group is the main recipient of the benefit in the comment section;(3) For reductions in regulatory costs, 
please describe details as to how the saving arises (e.g. reductions in adjustment costs, administrative costs, 
regulatory charges, enforcement costs, etc.;); (4) Cost savings related to the ’one in, one out’ approach are detailed 
in Tool #58 and #59 of the ‘better regulation’ toolbox. * if relevant 

II. Overview of costs – Preferred option- option 5 - Hybrid reporting by all CASPs50 

Crypto-assets service 
providers 

Tax Administrations (Member 
States) 

European Commission 

One-off 

Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

50 Due to existence of EU initiatives relative to crypto-assets, in particular the MiCA Regulation and AML Package 
(i.e. transfers of Funds Regulation), the estimated costs for DAC8 should be considered an upper bound as there could 
be commonalities already taken into account in the estimations of those proposals. 

61 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1-13 

0.1-5.7 

0.48  

0.21 

Total one-
off costs 
estimate are 
estimated at 
EUR 259 
million (or 
EUR 1.5 
million per 
CASP).  

The recurrent 
costs are 
estimated at 
22.6 million for 
all CASPs and 
it is estimated 
that they will 
not surpass 
EUR 135 000 
per entity on a 
yearly basis. 

The estimated 
recurrent costs 
vary 
approximately 
between EUR 
100 000 and 
EUR 6 million 
on a yearly 
basis for all 
Member States, 
or between 
EUR 3 700 and 
EUR 220 000 
on average per 
Member State. 

 One-off costs 
incurred by tax 
administrations 
in the EU-27 
are estimated to 
range between 
EUR 500 000 
and EUR 64.8 
million or 
between EUR 
18 000 and 
EUR 2.4 
million per tax 
administration 
on average, 
depending on 
the IT solution 
chosen. 

The recurrent 
costs are 
estimated to 
range 
between EUR 
100 000 and 
EUR 200 000 
on a yearly 
basis, and 
mainly relate 
to operating 
and 
maintaining 
the IT system 
for data 
storage and 
exchange 
relative to 
crypto-assets 

The 
developmen
t costs for 
defining the 
common 
EU 
reporting 
specificatio
ns (i.e. the 
type of data 
to be 
reported, 
collected 
and 
exchanged), 
and for 
setting up 
new and/or 
adapting the 
existing IT 
systems to 
enable the 
exchange of 
information 
could vary 
between 
EUR 500 
000 and 
EUR 1.4 
million. 

Direct 
administrative 
costs 

Direct adjustment 
costs 

Direct regulatory 
fees and charges 

Direct 
enforcement costs 

Indirect costs 

Implemen
ting an IT 
tool 
(Central 
Directory) 

Reporting 
requireme
nts  

Direct 
administrative 
costs 

Direct adjustment 
costs 

Direct regulatory 
fees and charges 

Direct 
enforcement costs 

Indirect costs 

62 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs related to the ‘one in, one out’ approach 

Direct adjustment 
costs  

Indirect 
adjustment costs 

Administrative 
costs (for 
offsetting) 

Total   

Total one-
off costs are 
estimated at 
EUR 259 
million (or 
EUR 1.5 
million per 
CASP). 

The recurrent 
costs are 
estimated at 
22.6 million for 
all CASPs and 
it is estimated 
that they will 
not surpass 
EUR 135 000 
per entity on a 
yearly basis. 

(1)  Estimates  (gross  values)  to  be  provided  with  respect  to  the  baseline;  (2)  costs  are  provided  for  each 
identifiable action/obligation of the preferred option otherwise for all retained options when no preferred 
option  is  specified;  (3)  If  relevant  and  available,  please  present  information  on  costs  according  to  the 
standard typology of costs (adjustment costs, administrative costs, regulatory charges, enforcement costs, 
indirect  costs;).  (4)  Administrative  costs  for  offsetting  as  explained  in  Tool  #58  and  #59  of  the  ‘better 
regulation’ toolbox. The total adjustment costs should equal the sum of the adjustment costs presented in the 
upper part of the table (whenever they are quantifiable and/or can be monetised). Measures taken with a 
view to compensate adjustment costs to the greatest extent possible are presented in the section of the impact 
assessment report presenting the preferred option. 

3.  Relevant sustainable development goals 

III. Overview of relevant Sustainable Development Goals – Preferred option(s) 
Relevant SDG 

Expected progress towards the Goal 

Comments 

SDG – 8 Decent work and 
economic growth 

The initiative will have a positive effect on tax 
revenues, which can in turn be used to fund 
Member States’ economic and social policies.  
Common rules at EU level would also be 
beneficial for competitiveness of the Single 
Market as the level playing field would be 
guaranteed, thus not leaving certain business in a 
less advantageous position;  

SDG – 9 Industry, 
innovation and infrastructure  

Having a streamlined process to report 
electronically all the specified data will promote 
digitalisation and the upgrading of technology.   

SDG 10 - “Reduced 
inequalities” 

The initiative aims at fighting tax evasion through 
that  all 
greater 

transparency.  Ensuring 

tax 

63 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
taxpayers pay the taxes dues contributes to greater 
equality  because  Member  States  can  avail 
themselves of more revenues to fund their policies 
and because it prevents that some taxpayers escape 
their  obligations  leaving  it  to  other  taxpayers  to 
shoulder the burden. 

64 

 
 
 
 
 
 
 
 
 
 
ANNEX 4:  ANALYTICAL METHODS 

In this section, we explain the underlying assumptions relevant for estimating both benefit and cost 
estimates. It is worthwhile noting that the estimates presented below are significantly limited as 
the data on crypto-assets is scarce.  

Benefits 

  We first estimate the number of CASPs operating in the EU by assuming the following: 

o  Exchanges are defined as businesses that allow customers to trade cryptocurrency for 
fiat money or other cryptocurrency.51 Our assumption is that this definition comes close 
enough in describing CASPs and thus, we give equal footing to the two notions. 
o  In August 2021, there were 672 exchanges worldwide.52 Therefore, 672 CASPs.  
o  25% share of global cryptocurrency value is received by Central, Northern & Western 

Europe.53 

o  By  applying  the  aforesaid  share  (i.e.  25%)  to  the  overall  number  of  CASPs,  we 
approximate that there are 168 CASPs with EU users. This assumption is simplistic 
and significantly limited as users and intermediaries cannot be equaled, but it gives an 
indication on how many CASPs operate in the EU (the real number might be higher). 
Any conclusion stemming from it should therefore be interpreted with caution. 
In  order  to  estimate  the  benefits  of  introducing  a  compulsory  reporting  and  exchange  of 
information on crypto-assets, we rely on the findings from a study  by Thiemann (2021) on 
realised capital  gains54,55 in  the EU Member States.  Realised capital  gains  accrue when the 
selling price of an asset exceeds the price of their initial purchase and the asset is sold.56 The 
study  based  its  findings  on  Bitcoin  data  only  that  had  been  received  from  Chainalysis  (a 
blockchain data platform). 
In 2020, EU citizens accrued EUR 3.6 billion of total realised capital gains according to the 
analysis by Thiemann (2021). This amount is unevenly distributed amongst the EU countries 
and unevenly taxed (if at all). In the study, a uniform EU tax rate of 25% is therefore applied, 
leading to an estimated EUR 0.9 billion of tax revenues from Bitcoin. 
In order to estimate tax revenues from all crypto-assets (all options) we assume the following: 
o  We  approximate  Bitcoin  market  share  to  50%  (47%  dominance  according  to  Coin 

 

 

 

Market Cap as of 27/6/2021).  

o  The other 50% is relative to the remaining cryptocurrencies on the market (almost 11 

000 cryptocurrencies in total according to Coin Market Cap). 

51 Coin Market Cap (2021). 
52 Chainalysis (2021). The 2021 Geography of Cryptocurrency Report. Analysis of Geographic Trends in Cryptocurrency Adoption and Usage. 
53 Idem. 
54 Thiemann (2021). Cryptocurrencies: An empirical view from a tax perspective, JRC Working Papers on Taxation and Structural Reforms, No 
12, also footnote 16. 
55 The analysis includes capital losses. The aggregate outcome is positive however (i.e. capital gains). 
56 Hungerford (2010). The Redistributive Effect of Selected Federal Transfer and Tax Provisions. 

65 

 
 
 
 
 
                                                           
 
o  In  order  to  estimate  revenues  from  all  crypto-assets,  we  double  the  tax  revenues 
previously projected by the above-mentioned study and estimate a new figure of EUR 
1.8  billion  (EUR  0.9  *  2).  Please  note  that  this  is  a  simplifying  assumption  since 
cryptocurrencies differ in value and consequently in possible realised capital gains. For 
a more precise estimate one should dispose of reliable data on cryptocurrencies other 
than Bitcoin, and employ sophisticated empirical methods. Since we do not have such 
data, caution in interpreting the results is advised. 

o  From  newly  estimated  tax  revenues,  we  further  exclude  the  transactions  under  the 
following  crypto-asset  categories  (i.e.  discarded  options):  non-marketable  crypto-
assets and utility tokens. Determining their respective shares in the total crypto-asset 
market, however, is challenging due to lack of official statistics. Bitcoin remains the 
dominant cryptocurrency representing almost half of the total market according to Coin 
Market Cap. The market share of the remaining cryptocurrencies is relatively small. To 
illustrate this better, already the sixth most dominant crypto-asset (XRP) comes with a 
share of less than 3% in the total cryptocurrency spectrum. As we are unable to sum up 
different cryptocurrencies per asset type and determine their corresponding shares in 
the total market, we artificially assign a 3% share per reported asset category (i.e. 
6% in total) to be excluded in these options. This assumption is imperfect and might 
also  be  inflated.  Any  estimates  deriving  from  it  should  be  therefore  be  cautiously 
interpreted.  

o  By reducing the benefits by 3% per asset category, this gives roughly EUR 1.7 billion 

(EUR 1.8 - EUR 1.8 * 0.06) in tax revenues. 

o  As  gains  from  crypto-assets  are  subject  to  high  volatility,  this  consequently  affects 
collected  tax  revenues  from  such  gains.  We  have  therefore  performed  a  sensitivity 
analysis on the applied 25% uniform tax rate (i.e. adding 15% and 35% tax rates to the 
analysis). This increase/decrease of 10 percentage points was motivated by the current 
use of tax rates on capital  gains  in  the Member States  (see the table below). As the 
majority of countries legislates tax rates above 15%, this has been used as the lower 
bound.  A  35%  tax  rate  has  been  used  as  the  upper  bound  to  maintain  the  same 
sensitivity interval from the central rate and to signal that no capital gains are being 
taxed above this rate. 

Table 7 EU country distribution based on legislated tax rates on capital gains 

Tax rates on 
capital gains 
Number of 
countries 

0-5% 

6-10% 

11-15% 

16-20% 

21-25% 

26-30% 

31-35% 

1 

2 

1 

8 

10 

2 

3 

Notes: In cases where countries do not legislate tax rates on capital gains specifically, corporate income 
tax  rate  is  used  instead.  Source:  Own  work  based  on  information  from  Taxes  in  Europe  Data  Base 
(TEDB). 

66 

 
 
 
 
 
 
o  By applying a 15% tax rate and also accounting for the crypto assets on top of Bitcoin 
(i.e. the other 50% of the market as done above), this gives EUR 1.08 billion (3.6 * 
0.15 * 2). We further exclude the two non-considered crypto-asset types, which brings 
the total amount down to EUR 1.02 billion (1.08 – 1.08 * 0.06).  

o  By applying a 35% tax rate and also accounting for the crypto assets on top of Bitcoin 
(i.e. the other 50% of the market as done above), this gives EUR 2.52 billion (3.6 * 
0.35 * 2). We further exclude the two non-considered crypto-asset types, which brings 
the total amount down to EUR 2.37 billion (2.52 – 2.52 * 0.06).  

o  We  estimate  an  absolute  difference  of  EUR  1.35  billion  between  the  lower  and  the 
higher bound. Please note, however, that the oscillations in cryptocurrency value may 
be higher than the ones employed in this sensitivity analysis.  

Costs 

The methodology employed for the estimation of the costs follows the Standard Cost Model, where 
each  option  can  be  projected  and  monetised  by  multiplying  the  total  quantity  (estimate)  of 
reportable users (Qs) under each option by a cost (P). 

𝐶𝑜𝑠𝑡𝑠 = 𝑄𝑠 ∗ 𝑃  

The average costs per service provider, as shown in the equation below, are obtained by dividing 
the total estimated costs (one-off or recurrent) by the number of service providers that would have 
to comply. The average costs per tax administrations are obtained by dividing the total costs (one-
off or recurrent) for tax administrations by twenty-seven. These are simplifying assumptions and 
the costs will vary given the size of the service provider and of the tax administration. We lack 
available data for a more granular estimation.  

𝐶𝑜𝑠𝑡𝑠
𝐶𝐴𝑆𝑃𝑠 𝑜𝑟 𝑇𝑎𝑥 𝐴𝑢𝑡ℎ𝑜𝑟𝑖𝑡𝑖𝑒𝑠

Table  1  below  summarises  all  the  cost  estimates  for  all  parties  concerns  (CASPs,  tax 
administrations and the European Commission). The total costs that would be incurred due to these 
legislative interventions are grouped according to the available options under the intervention. 

Table 8 Estimated costs and comparison (DAC2 vs DAC8) 

Affected Party / Costs 
Traditional financial 
institutions 
TA 
European Commission 

DAC2 estimate (DAC evaluation) 

One-off 
EUR 491 million 

EUR 49.1 million 
n/a 

DAC8 own estimates 

Recurrent 
EUR 42 million 

EUR 4.2 million 
n/a 

Affected Party / Costs 

One-off 

Recurrent 

67 

 
 
 
 
 
 
CASPs (all crypto-assets, 
except non-marketable 
crypto-assets and utility 
tokens) 
TA (decentralised IT 
solution) 

TA (Central Directory) 

TA (Single Access Point) 

EC (decentralised IT 
solution) 

EUR 233.1 – 284 million 
(EUR 1.4 – 1.7 
million/CASP) 

EUR 20.3 – 24.9 million 
(EUR 0.12 – 0.14 
million/CASP) 

EUR 64.8 million (EUR 2.4 
million/TA) 
EUR 1 – 12.96 million (EUR 
0.03 – 0.48 million/TA) 
EUR 0.5 million (EUR 0.02 
million/TA) 

EUR 6 million (EUR 0.22 
million/TA) 
EUR 1 – 5.67 million (EUR 
0.03 – 0.21 million/TA) 
EUR 0.1 million (EUR 3 
703 per TA) 

EUR 0.8 million 

EUR 0.1 million 

EC (Central Directory) 

EUR 0.48 million 

EUR 0.21 million 

EC (Single Access Point) 

EUR 1.35 million 

EUR 0.21 million 

Notes: (1) The figures in the table are rounded. (2) TA = tax administration in EU. EC = European 
Commission. (3) For costing details relative to TA and EC see Annex 5. CASPs costs are assumed 
not to be affected by the IT solution used for reporting/information exchange. 

In order to estimate the costs for CASPs, both recurrent and one-off, a number of assumptions 
needed to be employed.  

a)  Assumptions used to estimate the number of crypto-asset users: 

  According to Binance (2021), there were more than 100 million users of crypto-assets 

worldwide in 2020.  

 

  Bitcoin  remains  the  dominant  cryptocurrency  with  a  47%  total  market  share  (Coin 
Market  Cap  as  at  27/6/2021).  In  the  absence  of  the  official  statistics,  we  use  this 
dominance indicator and estimate 47 million Bitcoin users worldwide. 
In order to estimate the number of users in the EU or, more precisely, in the internal 
market, we rely on the data from Chainalysis. As they focus on Bitcoin information, 
they  find  that  just  over  25%  of  all  Bitcoins  are  held  at  service-based  addresses  in 
Northern and Western Europe. As we lack a more granular, per country, information, 
we assume that there are roughly 12 million Bitcoin users in EU by applying the same 
25% rate to the number of worldwide Bitcoin users. 

  We also use a simplifying assumption ‘one user, one account’ in the absence of more 
precise data, which lets us estimate 12 million accounts in the EU. This assumption is 
imperfect as a single user can own more accounts simultaneously and/or operate with 
cryptocurrencies other than Bitcoin. Any further estimates employing this assumption 
should be interpreted with caution. 

b)  Assumptions used to estimate total costs 

 

In  order  to  estimate  the  total  costs  for  CASPs,  we  rely  on  projected  DAC2  costs 
incurred by the traditional financial institutions when implementing the directive. The 
data employed derive from the Commission’s DAC evaluation report from 2019. 

68 

 
 
 
 
 
 

  The DAC2 average cost per account is estimated at EUR 6.4 for automatic exchanges 
between tax administrations, but the traditional financial institutions incurred 10 times 
higher costs than the authorities (i.e. EUR 64). A share of 92% and 8% of total costs 
were  relative  to  one-off  and  recurrent  costs  respectively  (Commission’s  DAC 
Evaluation 2019).  
In the DAC7 impact assessment, by taking DAC2 as a comparable set of obligations 
imposed  on  the  reporting  subject,  it  has  been  assumed  that  the  total  costs  for  the 
traditional  financial  institutions  were  higher  than  for  digital  platform  operators  (in 
scope of DAC7), given that the costs incurred by financial institutions encompassed 
the  costs  stemming  from  the  reporting  requirements  under  FATCA  and  CRS  under 
which  the  due  diligence  procedure  is  more  stringent.  Furthermore,  given  the  digital 
model  of  platform  operators  and  the  development  of  the  IT  infrastructure,  it  was 
assumed  that  access  to  the  data  was  less  costly.  These  assumptions  significantly 
lowered total reporting costs per account. We consider that these assumptions remain 
valid for CASPs as well. Hence, we assume that the total costs for CASPs will be EUR 
25 per account reported, of which EUR 23 for one-off and EUR 2 for recurrent costs 
(when applying the before said rates as per the Commission’s DAC Evaluation report). 
  When multiplying the retrieved costs per account by the number of accounts, this gives 
total recurrent costs of EUR 24 million (12 million accounts * EUR 2) and total one-
off costs of EUR 276 million (12 million accounts * EUR 23). 

  Similar  to  what  we  did  for  estimating  the  benefits,  the  costs  are  adjusted  by  6% 
(assumed to be the market share of non-marketable crypto-assets and utility tokens) in 
the options where the crypto-assets in scope exclude non-marketable crypto-assets and 
utility tokens.  

  By  reducing  the  costs  by  3%  per  assets  category,  this  gives  EUR  22.6  million  in 
recurrent (24 - 24 * 0.06) and EUR 259 million in one-off costs (276 - 276 * 0.06). 
  Furthermore, we also performed a sensitivity analysis (+/- 10% applied to the above 
estimated costs. This was done so as to account for (i) price volatility of crypto-assets 
which can result in having more or less crypto-asset users (depending on the direction 
of the prices) and (ii) potential need for the second round of reporting requests by tax 
administrations. This gives one-off cost ranging from EUR 233.1 to 284 million, and 
recurrent costs from EUR 20.3 to 24.9 million. 

c)  Assumptions used to estimate the number of CASPs 

  We estimate that there are 168 CASPs operating in the EU (see the assumptions made 

 

above under the benefits section). 
In order to estimate recurrent and one-of costs per CASP, we divide the estimated cost 
figures (see section b) above) by 168 for each of the scopes. The retrieved amounts are 
presented in the table above. 

69 

 
 
 
 
 
In order to estimate the  costs for tax administrations, both recurrent  and one-off, a number of 
assumptions needed to be employed: 

  The estimated costs for the exchange of information relative to crypto-assets depend 
on  the  IT  solution  provided.  We  differentiate  between  three  IT  options,  the 
specifications of which are detailed in Annex 5.  

  For  the  decentralized  IT  solution  in  particular,  we  rely  on  reported  DAC2    costs, 
divided by the number of accounts, which amounts to EUR 5.4 for one-off and EUR 
0.5 for recurrent costs (i.e. 92% and 8% respectively of total costs as per Commission’s 
DAC  Evaluation  report).  We  assume  that  tax  administrations  will  incur  exactly  the 
same costs when exchanging information under DAC8 provisions. This gives EUR 6 
million (12 million CASP accounts * EUR 0.5) in recurrent and EUR 64.8 million (12 
million CASP accounts * EUR 5.4 in one-off costs). 

  The total one-off costs for tax administrations when dealing with CASPs are estimated 
to range from EUR 0.5 million to EUR 64.8 million, while the total recurrent costs are 
estimated to vary between EUR 0.1 million and EUR 6 million. 

In order to estimate the costs for the European Commission, both recurrent and one-off, we 
assume that: 

  CASP related costs will depend on the IT solution provided. We differentiate between 

three IT options, the specifications of which are detailed in Annex 5.  

  The  one-off  costs  for  the  European  Commission  when  dealing  with  crypto-assets 
exchanges are estimated to range from EUR 0.48 million to EUR 1.35 million, while 
the recurrent costs are expected to vary between EUR 0.1 and EUR 0.21 million. 

70 

 
 
 
 
 
 
 
ANNEX 5:  IT SOLUTION 

1.  General description of DAC IT solutions 

The  Directive  on  Administrative  Cooperation  (DAC)  sets  in  Section  II,  the  legal  basis  for  the 
automatic exchange of different types of information between the competent authorities of each 
Member State.  

There are four particularities concerning the reporting and exchange of information of the different 
DACs:  

i) 
ii) 

iii) 

iv) 

DAC1 and DAC3 exchanges deal with information held by the competent authorities;  
DAC2, DAC4, DAC6 and DAC7 exchanges deal with information that the competent 
authority  receives  from  a  reporting  entity,  be  it  a  financial  institution,  a  large 
multinational enterprise, an intermediary or a digital platform operator;  
DAC3 and DAC6 information is uploaded by each competent authority on a Central 
Directory, where it is available to the other competent authorities, and  
DAC1,  DAC2,  DAC4  and  DAC7  information  is  automatically  exchanged  between 
competent authorities by using the Commission Communication Network (CCN).  

The Commission provides the IT infrastructure making these automatic exchanges possible, i.e. 
the transmission channel (CCN), the XML schemas and the XSD User Guide.57 The Commission 
is  a data processor. Except  for DAC1 and DAC3, the exchange of information  under the other 
DAC’s  consists  of  a  three-step  approach:  First,  the  information  is  collected  and  reported  by  a 
reporting  entity;  second,  it  is  received  by  the  relevant  competent  authority  and  finally,  it  is 
exchanged by this competent authority either with other relevant competent authorities or to the 
Central Directory.  

This proposal would introduce a reporting standard to provide competent authorities with essential 
information about crypto-assets. Regardless of the complexity of the policy options that will be 
chosen, there are in principle three main IT solutions for implementing an efficient exchange of 
information:  

I. 

Decentralised system – the traditional DAC three stage approach  

-  This system would assume that the CASPs report the information to the competent authority 
of their tax residence or where they are authorised to operate.58 These competent authorities 
would in turn then exchange the concerned information with the competent authorities of other 
relevant Member States. As a result, each EU tax administration receives a maximum of 26 
“blocks” of reportable information, which have to be further processed in order to be integrated 

57 XML schema is used to describe and validate the structure and the content of XML data. XML schema defines the elements, attributes and data 
types. These are filled in with the information to be exchanged under DAC. 
58 Those CASPs that are not already authorised and registered under the MiCA registration would be registered in a separate register for direct tax 
purposes. Member States would feed the register while the Commission services would provide the infrastructure. This is a  similar approach to 
DAC7. 

71 

 
 
 
 
 
 
 
                                                           
in the national IT systems and then used for the envisaged purposes (risk assessment, etc.). The 
exchange (send/receive) takes place at regular intervals (once per year or each quarter), which 
are generally defined by the Directive. Each competent authority has to set-up and maintain a 
national  IT system implementing the processes described above. This is the option that has 
been used for the implementation of the provisions laid down in DAC2 and DAC4 and the 
recently agreed DAC7. 

II. 

Centralised system – the traditional DAC - Central Directory  

-  As for DAC 3 and 6, this system would assume that the CASPs report the information to the 
competent  authority  of  their  tax  residence  or  where  they  are  authorised  to  operate.  These 
competent  authorities  would  in  turn  then  upload  the  reported  information  to  the  Central 
Directory to which competent authority of each Member State can connect for consulting and 
downloading relevant information (information related to its taxpayers only).  

III. 

Single access point – new IT alternative  

-  Under this new  IT  alternative, the reporting entity would no longer report information  in  a 

given country but instead directly into a general database (the “Single Access Point”).  

-  More specifically, the first step would be that the competent authority authorizes/grants access 
(after receiving the request) to the CASPs to upload data to the Single Access Point maintained 
by  the  European  Commission.  In  this  phase,  the  competent  authority  would  check  that  the 
requesting  CASP  fulfils the  requirements  laid  down  in  the  Directive  (i.e.  registration,  TIN, 
etc.). Once authorized, the CASP may upload the relevant information to the Single Access 
Point.  

-  The authorisation to report information to the Single Access Point would be managed by the 
Member State of residence of the CASP or in the Member State where they are authorized to 
operate.  

-  The reporting of information would happen in  a standardised way like for traditional DAC 
exchanges through an XML schema and a XSD User Guide, XML schema and a XSD User 
Guide. 

-  Consequently, CASPs would only be allowed to upload standardised information to the Single 
Access Point. Competent authorities of each Member State would have the right to access the 
information. 

-  As  in  the  Central  Directory,  the  Commission  would  have  limited  or  no  access  to  the  data. 

Consequently, the Commission would play a data processor role only. 

The  second  and  third  IT  solutions  could  appear  similar  as  they  are  both  centralised  and  the 
infrastructure is provided by the Commission services. However, the difference is the necessity of 
an  intermediary.  In  the  second  IT  solution,  the  tax  administration  has  to  be  in  possession  of 
information or data in order to be able to upload it to the Central Directory and make it available 
to other tax administrations, i.e. the tax administration takes the role of an intermediary between 
the reporting entity and the central platform.  

72 

 
 
 
 
 
 
 
 
 
In the third IT solution there is no intermediary between the reporting entity and the database where 
the  information  will  be  available  to  tax  administrations  in  the  new  IT  solution.  There  would 
therefore be no development costs of a national IT infrastructure for the collection of information 
and export to the Central Directory. This being said, the national tax administrations are likely to 
incur a certain level of IT costs as they would need to download in their own national system the 
data that is made available through the Single Access Point to be able to use them. This means that 
mainly the reporting entity and the Single Access Point will bear costs for the IT development, be 
it implementing the reporting format or updating an existing IT interface.  

For the three proposed  exchange  IT solutions,  the GDPR requirements remain the same  as the 
information collected and exchanged and the access of Member States to that information will be 
of the same nature regardless of the method selected.  

2.  Cost-benefit analysis 

Having an IT solution that will allow a proper exchange of information relative to crypto-assets 
will  come  with  both  benefits  and  costs.  As  these  differ  between  available  IT  options,  the 
quantification of costs is based on the cost information (one-off and recurrent) incurred for setting 
up and operating DAC6,59 as well as DAC260 and DAC761 (see the table below). Benefits, on the 
other hand, have been assessed qualitatively due to limited data. 

Table 9 Summary of costs relative to IT solution (in EUR million) 

Costs / Entities 
One-off 
Recurrent (annual) 
Total 

Decentralised 

MS 
64.8 
6 
70.8 

Commission 
0.8 
0.1 
0.9 

IT solution 
Central Directory 
MS 
1 - 12.96 
1- 5.67 
2 - 18.63 

Commission 
0.48  
0.21 
0.69 

Single Access Point 
MS 
0.5 
0.1 
0.6 

Commission 
1.35 
0.21 
1.56 

A decentralised approach means that the Member States are responsible for setting up, maintaining 
and updating their national IT systems so as to abide by the provisions set out in the DAC. The 
cost estimates stemming from the decentralised approach are based on DAC2 costs incurred by 
tax  administrations,  which  are  further  adapted  to  the  population  of  crypto-asset  accounts  (see 
Annex 4). Even though these costs are likely to be substantial, the maximum amount should not 
surpass EUR 64.8 million in one-off and EUR 6 million in recurrent costs. Due to lack of official 
data, however, precise estimates on the costs to be incurred in the Member States cannot be made. 
Moreover, the costs for the Commission under this option are likely to be relatively low.62 

59 European Commission (2017). Commission staff working document- Impact Assessment Accompanying the document Proposal for a COUNCIL 
DIRECTIVE  amending  Directive  2011/16/EU  as  regards  mandatory  automatic  exchange  of  information  in  the  field  of  taxation  in  relation  to 
reportable cross-border arrangements, SWD/2017/0236 final.  
60  European  Commission.  (2019).  Evaluation  of  the  Council  Directive  2011/16/EU  on  administrative  cooperation  in  the  field  of  taxation  and 
repealing Directive 77/799/EEC, SWD(2019) 327 final  
61 European Commission. (2020). Commission Staff Working Document – Impact assessment accompanying the Proposal for a Council Directive 
amending Directive 2011/16/EU on administrative cooperation in the field of taxation, SWD(2020) 131 final. 
62 European Commission. (2020). Commission Staff Working Document – Impact assessment accompanying the Proposal for a Council Directive 
amending Directive 2011/16/EU on administrative cooperation in the field of taxation, SWD(2020) 131 final. 

73 

 
 
 
 
 
 
 
 
                                                           
The second option would entail relying on the existing system of information exchange, namely 
the Central Directory set-up and managed by the European Commission. The total one-off costs 
of  upgrading  and  updating  the  Central  Directory  are  estimated  to  be  EUR  480  000,  while  the 
recurrent  costs  would  amount  to  EUR  210  000.  Since  some  IT  infrastructure  has  already  been 
developed and is operational, the projected cost is likely to be similar to those of running DAC6. 
Moreover, under this option, the national tax authorities are also likely to bear costs as they may 
extract  relevant  information  from  the  Central  Directory  into  national  databases  and  have  an 
upgraded (or newly built) IT infrastructure for data downloading and uploading operations. Since 
precise cost estimates are challenging to make, we assume that such costs could be in the order of 
millions of euros, but not higher than EUR 12.96 million (one-off) and EUR 5.67 (recurrent). This 
can  be  explained  by  the  Commission’s  effort  to  provide  a  centralised  IT  architecture  that  can 
significantly reduce costs for national administrations. 

Finally, a new Single Access Point would bring about greater centralisation since CASPs would 
be directly linked to the Commission’s IT interface. This new IT solution will likely entail higher 
costs for the Commission to develop it as the number of connected entities will be higher than 
usual (i.e. around 168 CASPs63 vs 27 national tax administrations). Considering the costs incurred 
for  developing  the  IT  interface  under  DAC6,  we  assume  that  the  total  one-off  costs  for  the 
Commission will reach EUR 1.35 million as a minimum. The recurrent costs will be approximately 
EUR 210 000. The Commission costs for developing the Single Access Point are expected to be 
higher compared to the ones needed to update the Central Directory. However, for the Member 
States, it remains challenging to precisely assess the costs that will be incurred for adapting their 
systems to the Single Access Point. While we estimate, as a minimum, EUR 500 000 and EUR 
100 000 for the one-off and recurrent costs respectively, we are unable to quantify the cost ceilings 
which  might  be  substantial  (in  the  order  of  millions  of  euros).  This  is  due  to  the  fact  that  the 
Member States remain responsible to ensuring that CASPs have fulfilled their legal obligations 
and might still opt for setting up national databases to store previously extracted data. 

Taking into account uncertainty on the actual size of the benefits in the absence of reliable data, 
no quantification of benefits has been provided. Possible benefits stemming from the initiative can 
be looked at qualitatively through cost reduction for the Member States. Even though some savings 
can  be  obtained  via  the  Single  Access  Point  where  the  Commission  provides  the  necessary 
infrastructure and CASPs report directly into the new interface, a reliable cost estimation leading 
to proper IT solution comparison remains challenging to make. Conversely, some IT infrastructure 
already  exists  for  the  use  of  the  existing  Central  Directory  as  this  IT  solution  could  be 
delivered/deployed within a shorter legal base deadline, thus likely having a positive impact on 
savings. This point is of particular importance in this case where the need to regulate reporting and 
ensure exchanges of information on crypto-assets is urgent and a prerequisite for other initiatives 
in the EU as well as in the individual Member States. Similarly, some existing IT infrastructure 
also exists under the decentralized approach, but the estimated costs are quite high compared to 
other IT solutions and unlikely to be offset by any possible benefits. 

63 Information on how we estimate the number of CASPs and their reporting costs can be found in Annex 4. 

74 

 
 
 
 
 
                                                           
Finally, when it comes to the policy options, the three IT implementation choices are feasible no 
matter which policy option is chosen. The feasibility of the IT solution depends neither on the size 
of the CASPs, nor on the types for crypto-assets in scope nor the reporting method. The question 
here  is  more  about  the  efficiency  of  the  different  IT  solutions  in  achieving  the  initiative’s 
objectives. 

3.  Overall assessment 

Each  of  the  proposed  IT  solutions  have  advantages  and  disadvantages.  The  first  two  options 
described above have the advantage of having already been tested and developed, which revealed 
their strengths as well as their weaknesses while developing or using them for the different DAC 
exchanges.   

For the moment, the first two IT solutions coexist and are used for different DAC exchanges. The 
new IT solution would become a third alternative for DAC information exchanges.  

As  already  explained,  the  main  advantage  of  the  Single  Access  Point  is  the  absence  of  an 
intermediary  tax  administration,  which  means  that  the  information  is  available  in  one  single 
platform  without  additional  IT  infrastructures  at  the  level  of  the  intermediary.  The  cost  and 
resources for the intermediary are therefore reduced in terms of implementation and development. 
Furthermore, there would only be one single IT solution instead of 27 that the reporting entity will 
have to adapt to. These IT tools would also potentially reduce development costs for compliance, 
risk  assessment,  statistics  and  other  tools,  which  are  required  to  show  the  respective  use  of 
information received through the DAC framework.  

Despite the listed advantages of the Single Access Point solution, the traditional Central Directory 
is considered a better solution because it is already known by Member States and used for DAC3 
and DAC6 purposes. Precise calculations of costs are not possible to make as this would be a new 
and  untested  solution,  but  Member  States  would  need  to  adapt  their  national  systems  to  new 
channels for receiving data. Another advantage compared to the Single Access Point is that it can 
be delivered and deployed with a shorter deadline. It is urgent to start the reporting and exchange 
of crypto-asset information as other initiatives, whether at EU level or at national level, rely on 
such  information  in  order  to  operate  and  considering  the  current  serious  lack  of  necessary 
information. Compared to the decentralised solution, the Central Directory solution provides for 
more flexibility in the future in case the IT solutions will need to be harmonised for the DAC as a 
whole. The introduction of a Single Access Point would be more appropriate to consider for the 
DAC  including  all  amendments  in  order  to  calculate  and  reduce  costs  with  a  high  degree  of 
certainty.  

75 

 
 
 
 
 
 
 
 
 
ANNEX 6:  STRENGTHENING OF ADMINISTRATIVE COOPERATION 
BETWEEN TAX AUTHORITIES 

In the broader context of the DAC, this impact assessment also presents a further strengthening of 
administrative cooperation between tax authorities, including a review of the current compliance 
framework, a clarification of the rules applicable to e-money and the expansion of the exchange 
of cross-border tax rulings to rulings granted to natural persons.   

The European Court of Auditors (ECA) report64 and the European Parliament resolution65 pointed 
at the inefficiencies and the need of improvement in several areas of the Directive including the 
compliance measures, e-money provisions and rulings.66 

The problems 

There are inefficiencies in the current framework on administrative cooperation and enforcement 
of the DAC provisions, which stem from a lack of clarity concerning some provisions of the legal 
text underpinning this framework, in particular when it comes to the application of penalties or 
other compliance measures, or the exchange of information on e-money. Furthermore, the current 
framework for exchanging cross-border rulings could be made more coherent. 

To illustrate the need for clarification of some concepts: DAC established a reporting obligation 
on a  number  of actors  (such  as  financial  institutions  under  DAC2, MNEs  under  DAC4, 
intermediaries under DAC6, digital platform operators under DAC7). Under the current wording 
of Article  25a of  the  DAC,  Member  States  have  the  obligation  to  introduce “effective, 
proportionate  and  dissuasive” penalties,  in  case  of  non-compliance  with  the  reporting 
obligations.  Non-compliance can consist for example in the absence of reporting, late reporting, 
incomplete or false reporting, etc. However, as shown in Annex 7, there are significant differences 
between the Member States’ penalties frameworks set  out  for non-compliance under the DAC, 
which  may  have  a  negative  effect  on  compliance  with  the  aforementioned  principles.  Member 
States having implemented low-level penalties as compared to other Member States do not provide 
for  a  dissuasive  penalty  framework  and  thus  undermine  the  proper  functioning  of  DAC. 
Considering the current vague wording on compliance measures in the DAC, the legal basis for 
infringement procedures in situations where the national measures are not regarded as dissuasive 
enough is fragile. 

Another area which suffers from a lack of a clear and unequivocal drafting are the rules pertaining 
to the reporting and exchange of information on e-money products. E-money is broadly defined as 
an electronic store of monetary value on a technical device that may be used for making payments 
to entities other than the e-money issuer. It acts as a prepaid bearer instrument, which does not 
necessarily  involve  bank  accounts  in  transactions.  Most  Member  States  interpret  the  existing 

64 Special Report N°03/2021: Exchanging tax information in the EU: solid foundation, cracks in the implementation. 
65  See  footnote  4.  European  Parliament.  (2021).  European  Parliament  resolution  of  16  September  2021  on  the  implementation  of  the  EU 
requirements for exchange of tax information: progress, lessons learnt and obstacles to overcome, retrieved from:  
https://www.europarl.europa.eu/doceo/document/TA-9-2021-0392_EN.pdf 
66  European  Court  of  Auditors.  (2021).  Exchanging  tax  information  in  the  EU:  solid  foundation,  cracks  in  the  implementation,  Exchanges  of 
information 
from: 
is 
https://www.eca.europa.eu/Lists/ECADocuments/SR21_03/SR_Exchange_tax_inform_EN.pdf 

information 

increased, 

reported. 

retrieved 

33-34, 

Pages 

some 

have 

still 

but 

not 

76 

 
 
 
 
 
 
 
 
 
                                                           
provisions on the reporting and exchange of financial information (DAC2) as including e-money 
within its scope, whereas others do not. This creates the risk of an uneven playing field within the 
financial  sector  and  across  Member  States.  Although  e-money  products  are  mainly  used  for 
payment and quick transactions and not for investment, they could also be used to store money 
and, in the current situation, avoid reporting. 

Finally,  the  existing  rules  provide  for  tax  transparency  on  cross-border  rulings  and  advanced 
pricing agreements (APAs), under DAC 3. Tax rulings and APAs are most commonly associated 
with  legal  persons.  However,  natural  persons  may  also  benefit  from  cross-border  rulings  on 
complex tax arrangements. The latter category of cross-border rulings might be of interest to the 
competent tax administrations of other Member States. 

Strengthening  the  compliance  framework  and  completing  the  existing  framework  for  automatic 
exchange of information on e-money and rulings  

The ECA report and the resolution of the European Parliament mentioned above both conclude 
that the lack of a consistent compliance framework, the lack of clear provisions on e-money and 
the non-inclusion of some types of rulings significantly reduce the efficiency of the DAC. Building 
upon the findings of those reports, the initiative would include clarifications and fixes to the current 
administrative cooperation framework to ensure it becomes more effective. These changes mainly 
concern the following:  

a)  Compliance framework 

As mentioned above, there is a need to clarify the compliance framework provided for in DAC to 
ensure a more consistent implementation across the EU Member States. It would consist of setting 
a common minimum  level  of penalties  for the  most  serious non-compliant behaviours, such as 
complete absence of reporting despite administrative reminders. It would also provide guidance in 
the DAC itself as to what effectiveness, dissuasiveness and proportionality should imply for each 
Member  State’s  compliance  framework.  This  would  establish  the  basis  for  guaranteeing  a 
compliance  framework  that  complies  with  the  principles  of  effectiveness,  proportionality,  and 
dissuasiveness. In relation to the principle of effectiveness, the DAC might indicate what broad 
types of conducts and behaviours might be penalised leaving the Member States with the option 
to go further, depending on their domestic circumstances. The DAC might also put forward some 
types of penalties and other compliance measures that serve as guidance for the Member States in 
the development of their own legal compliance framework. Penalties could be set in proportion to 
the economic size of the taxpayer/reporting entity and/or to the relevant amount of tax owed.  

b)  5.3.2.2 E-money 

The scope of reporting under DAC2 would be clarified in order to explicitly include tax relevant 
data on e-money. It would ensure that a single standard for reporting and exchange of e-money 
data will apply. At the international level, the OECD is also working on amending the CRS to 
explicitly include e-money.  

77 

 
 
 
 
 
 
 
  
 
 
c)  5.3.2.3 Exchanges of cross-border rulings 

Rulings provided by Member States’ tax authorities for the benefit of natural persons are currently 
not subject to reporting and automatic exchange between Member States under DAC. However, 
covering all taxpayers would be in line with the general logic of the DAC.  

Currently, there is only limited information exchange between national authorities on tax rulings 
for natural persons, if at all. Member States whose tax base is adversely affected by the tax rulings 
of others cannot react, given that they will not even know of the existence of the respective tax 
ruling that might cover arrangements leading to base erosion in their jurisdiction. In line with the 
joint  effort  to  combat  tax  avoidance,  there  is  clearly  a  need  for  greater  transparency  and 
information sharing on cross-border tax rulings.67  

The inclusion of natural persons would limit the possibility for circumvention of the information 
exchange  by  adapting  the  respective  setup  of  the  tax  structure.  Therefore,  this  initiative  would 
make compulsory the reporting of tax rulings for natural persons with a cross-border element. The 
obligation  to  exchange  information  about  tax  rulings  would  in  no  way  restrict  or  limit  the 
possibility for natural persons to request rulings from the national administration. 

67 European Commission SWD. (2015): Technical analysis of focus and scope of the legal proposal Accompanying the document Proposal for a 
Council Directive amending Directive 2011/16/EU as regards exchange of information in the field of taxation. 

78 

 
 
 
 
 
 
 
 
                                                           
ANNEX 7:   OVERVIEW OF DIFFERING PENALTIES APPLIED BY 
MEMBER STATES 

Based on the information gathered through the consultation of Member States, all Member States 
have legislation in place, which provides for the application of penalties for infringements pursuant 
to the provisions of the DAC. Additionally, the vast majority of Member States have developed 
administrative procedures for verifying compliance with the DAC. The measures through which 
the Member States monitor the fulfilment of the obligations derived from the DAC are, amongst 
others, desk-based checks and on-site inspections, as well as statistical analysis..  

Of the circumstances and factors that some Member States take into account to determine the level 
of  the  penalty,  the  degree  of  the  intentionality  of  the  offending  subject  is  the  most  frequently 
applied. Some Member States also consider whether there has been repetitive non-compliance, as 
well as the size of the subject or the benefit obtained from the offending conduct. 

The majority of Member States distinguish between late reporting of information, reporting with 
minor errors, reporting with false statements or documents, and not reporting at all when designing 
penalties and compliance measures for infringements of reporting obligations under the DAC. 

Although the domestic context must be considered when analysing the differences in the penalties 
designed for the different DAC’s, it is also necessary to emphasize that to guarantee a level playing 
field  throughout  the  European  internal  market,  the  competent  authorities  must  perform  this 
analysis with a European perspective. 

From the table below, we can clearly distinguish significant differences in the amounts of penalties 
set  by  different  Member  States.  Particularly  striking  are  the  large  differences  in  the  amount  of 
minimum penalties that may affect, to a greater or lesser extent, the effectiveness and efficiency 
of  compliance  with  the  rules  of  the  DAC.    Although  there  are  significant  differences  in  the 
maximum  amount  of  sanctions  applied,  it  is  considered  that  this  aspect  would  fall  within  the 
discretion of the Member States to make their compliance system stricter in the event of any non-
compliance. 

To  correctly  analyse  the  biggest  differences  between  Member  States’  compliance  measures  in 
DAC2, it is important to bear in mind that some Member States fix these amounts in relation to 
the number of accounts or even concerning the data of these accounts. Differences of the penalties’ 
calculation  must  be  considered  when  assessing  the  differences  between  the  minimum  and 
maximum penalties established by Member States. 

Under DAC4, large multinational enterprises with a total consolidated group revenue of more than 
EUR 750.000.000 are obliged to submit annual Country-by-Country (CbC) reports. The failure to 
comply with the domestic law transposing DAC4 can lead to minimum penalties as low as or even 
below EUR 1.000. This very low minimum amount of penalties does not provide a great dissuasive 
effect  on  obliged  subjects.  In  most  cases,  the  cost  of  complying  with  this  rule  will  exceed  the 
amount of the minimum penalties.  

79 

 
 
 
 
 
 
The same arguments can be used to analyse the penalties provided for breaches of DAC6, where 
the highest minimum penalty does not exceed EUR 6.000. At the same time, a minimum amount 
of penalties below EUR 1.000 is widespread among Member States.  

Table 10 – Overview of penalties in Member States. 

MINIMUM AMOUNT 
OF PENALTIES (IN EUR 
OR NATIONAL 
CURRENCY FOR NON-
EA MEMBER STATE) 

MAXIMUM AMOUNT OF 
PENALTIES 
(IN EUR OR NATIONAL 
CURRENCY FOR NON-EA 
MEMBER STATE) 

Minimum amount in 
EUR or for non-EA MS 
their national currency 
with EUR amount in 
brackets. 

Maximum amount in EUR or 
for non-EA MS their national 
currency with EUR amount in 
brackets 

PERSONAL SCOPE / SCOPE RATIONE MATERIAE OF 
INFRINGEMENTS COVERED BY PENALTIES 

MEM
BER 
STATE 

INFRINGEM
ENT OF  
REPORTING 
OBLIGATIO
NS UNDER 
RELEVANT 
DACS 

The scope rationae materiae (i.e. the following 4 
categories are covered in national law: 1) no 
reporting, 2) late reporting, 3) on purpose wrong 
reporting, 4) partial reporting and the respective fines 
for each category if differentiation is done in the fines 
for the different categories in national law. The 
different fines are then mentioned in column 4 and 5).  

The personal scope: if a differentiation in minimum 
and maximum penalties is made for 
individuals/natural persons and legal persons the 
penalties are mentioned also separately per type of 
person at the end of column 3 with the relevant 
penalties in column 4 and 5.  

Indication, if relevant, whether the fines are foreseen 
per individual infringement (e.g. the penalty applies 
every time when a single bank account was not 
reported) or only cumulative for a number of 
detected infringements. Rationale: to get an idea of 
the intensity of sanctioning/penalties. This is the info 
Benjamin is after. Pay careful attention to it whether 
you can detect this on the basis of national law or not. 
- 
- 
- 

AT 

DAC 2 

- 

Scope ratione materiae 

Not determined 

Scenario  2:  No  differentiation  in  fines  for  different 
Infringement  of  reporting 
reporting  categories  - 
obligations under DAC 2 

- 

Personal scope  

No  differentiation  between  legal  entities  or  natural 
persons for application of penalties is made 

- 

Individual / Cumulative application: Not 
explicit but it appears that penalties are 
applied per person and per infringement. 

DAC 4 

 

Scope ratione materiae 

Not determined 

Scenario  2:  No  differentiation  in  fines  for  different 
reporting  categories  - 
Infringement  of  reporting 
obligations under DAC 4  

 

Personal scope: Penalties apply to legal 
persons  

80 

Different fine amounts apply 
depending on whether the 
infringement is intentional or 
results from gross negligence  
Intentional: 200 000 EUR  
Gross negligence: 100 000 
EUR 

Different  fine  amounts  apply 
depending  on  whether  the 
infringement  is  intentional  or 
results from gross-negligence  
Intentional  failure to file, late 
filing 
inaccurate 
file 
information: 50 000 EUR    
Gross  negligence  failure  to 
file 
file, 

filing  or 

late 

or 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
DAC 6  

BE 

DAC 2  

DAC 4  

DAC 6  

BG 

DAC 2  

 

 

Individual / Cumulative application: Not 
explicit but it seems that penalties are 
applied per person and per infringement. 
Scope ratione materiae 

Scenario  2:  No  differentiation  in  fines  for  different 
reporting categories.  

 

Personal scope 

No  differentiation  between  legal  entities  or  natural 
persons for application of penalties is made  

 

Individual / Cumulative application 

Penalties are applied per person and per infringement. 
According  to  the  Austrian  Financial  Criminal  Act 
(FinStrG) and the Corporate Criminal Act (VbVG), more 
than  one  person  could  be  fined  for  the  same 
non/false/late-reporting case 
Scope ratione materiae 
Non-communication of information 
Any other infringement 
If infringement with intention to commit fraud or 
harm 
If use of falsifications 
Personal scope 
No differentiation between legal entities or natural 
persons for application of penalties 
Individual / Cumulative application 
Penalties per individual infringement and person 
Scope ratione materiae 
If non-communication, late communication or 
incomplete communication not committed in bad 
faith or committed without intention to commit fraud 
If the above committed in bad faith or with intention 
to commit fraud 
Personal scope 
Legal entities 
Individual / Cumulative application 
Penalties per individual infringement and person. The 
penalties increase gradually per repeated 
infringement according to a table  
Scope ratione materiae 
Incomplete information, if given without intention to 
commit fraud 
Incomplete information, if given with intention to 
commit fraud 
Non-provision or late provision of information without 
intention to commit fraud 
Non-provision or late provision of information with 
intention to commit fraud 
Personal scope 
No differentiation between legal entities or natural 
persons for application of penalties 
Individual / Cumulative application 
Penalties per individual infringement and person. 
Scope ratione materiae 
1) Non-reporting of information or incorrect 
information 

2) Opening a new account without adhering to 
the customer due diligence procedures 
3) Not keeping the customer due diligence 
documentation 

81 

Not determined 

inaccurate 
000 EUR    

information:  25 

amounts 

Different 
apply 
depending  on  whether  the 
infringement  is  intentional  or 
results from gross-negligence  
non-reporting, 
Intentional 
false 
late 
or 
reporting: up to 50 000 EUR  
non-
negligence 
Gross 
reporting,  false  reporting  or 
late  reporting:  up  to  25  000 
EUR 

reporting 

250 EUR 
250 EUR 

1000 EUR per reportable 
account 
2500 EUR 
500 000 EUR or imprisonment 
up to 5 years 
500 000 EUR or imprisonment 
up to 5 years 

1250 EUR 

12 500 EUR 

25 000 EUR 

25 000 EUR 

1250 EUR 
2500 EUR 
5000 EUR 

12 500 EUR 
25 000 EUR 
50 000 EUR 

12 500 EUR 

500 000 EUR 

Not determined 

Not determined 

Not determined 
Not determined 

EUR 130 per reportable 
account 
EUR 260 per reportable 
account for repeat violation 

EUR 500 per reportable 
account 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Not determined 

EUR 1000  
EUR 1000 

EUR 500 per reportable 
account (outside of criminal 
sanctions, if applicable) 

EUR 50 000  
EUR 100 000 in repeat 
violations 

EUR 100 000  
EUR 150 000 in repeat 
violations 

EUR 25 000 
EUR 50 000 in repeat 
violations 

EUR 75 000 
EUR 125 000 in repeat 
violations 

Fixed EUR 5000 
Fixed EUR 7500 in 
repeat violations 

Fixed EUR 5000 
Fixed EUR 7500 in repeat 
violations 

EUR 25 000 
EUR 50 000 in repeat 
violations 

EUR 75 000 
EUR 100 000 in repeat 
violations 

4) Not closing accounts after refusal by the 
account holder to provide self-certification or 
other information. Manipulating the IT system 
in order to hamper the aggregation of financial 
accounts of account holders 
5) Account Holder providing misleading self-
certification or other misleading information 

Personal scope 
The fine for providing misleading self-
certification or other information (point 5 
above) applies to account holders (mostly 
natural persons) 
All other fines (points 1-4 above) apply to 
Reporting Financial Institutions (legal persons) 

Individual / Cumulative application 
Penalties 1) and 2), i.e. for non-provision of 
information or incorrect information and  for opening 
a new account without adhering to the customer due 
diligence procedures are per individual infringement 
and per each reportable account 
Penalties 3) and 4) i.e. for not keeping the customer 
due diligence documentation and for not closing 
accounts after refusal by the account holder to 
provide self-certification or other information or 
manipulating the IT system in order to hamper the 
aggregation of financial accounts of account holders 
are cumulatively applicable for the financial institution 
as a whole 
Penalty 5) for providing misleading self-certification or 
other misleading information is per individual 
infringement and per each reportable account of the 
same account holder 
Scope ratione materiae 
1) Non-reporting of information under CbCR 

2) Incomplete or incorrect reporting under CbCR 
(applies also in case the ultimate parent company 
does not provide the necessary information) 

3) Failure of the resident constituent entity to notify 
the tax administration that the ultimate parent entity 
refused to provide the information 

3) Failure of the resident constituent entity to notify 
the tax administration whether it is an ultimate parent 
entity, a surrogate parent entity or a constituent 
entity 

Personal scope 
The fines apply to constituent entities, which 
are legal entities. 

Individual / Cumulative application 

82 

DAC 4  

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
DAC 6  

Penalties are cumulatively applicable 

Scope ratione materiae 
1) Non-reporting on an arrangement by intermediary 
or by relevant taxpayer 

2) Incomplete or incorrect reporting on an 
arrangement by intermediary or by relevant 
taxpayer 

3) Intermediary using the legal professional 
privilege waiver and failing to notify other 
intermediaries or the relevant taxpayer 

4) Intermediary using the legal professional 
privilege waiver and failing to notify the tax 
administration of the details of the other 
intermediaries or of the taxpayer 

5) Intermediary failing to notify the unique ID of 
the arrangement to other intermediaries or the 
relevant taxpayer 

Personal scope 
The fines apply to both intermediaries and 
relevant taxpayers, both of which can be either 
a natural person or a legal entity 

Individual / Cumulative application 
All Penalties 1)-5) are applicable per (individual) 
infringement of the respective obligations. 

83 

EUR 2500 (for individuals) 
EUR 5000 (for individuals in 
repeat violations) 
EUR 5000 (for legal entities 
and sole traders) 
EUR 10000 (for legal entities 
and sole traders in repeat 
violations) 

EUR 1500 (for individuals) 
EUR 3000 (for individuals in 
repeat violations) 
EUR 4000 (for legal entities 
and sole traders) 
EUR 8000 (for legal entities 
and sole traders in repeat 
violations) 

EUR 2500 (for individuals) 
EUR 5000 (for individuals in 
repeat violations) 
EUR 5000 (for legal entities 
and sole traders) 
EUR 10000 (for legal entities 
and sole traders in repeat 
violations) 

EUR 400 (for individuals) 
EUR 800 (for individuals in 
repeat violations) 
EUR 750 (for legal entities 
and sole traders) 
EUR 1500 (for legal entities 
and sole traders in repeat 
violations) 

EUR 400 (for individuals) 
EUR 800 (for individuals in 
repeat violations) 
EUR 750 (for legal entities 
and sole traders) 
EUR 1500 (for legal entities 
and sole traders in repeat 
violations) 

EUR 1000 (for 
individuals) 
EUR 2000 (for 
individuals in repeat 
violations) 
EUR 2500 (for legal 
entities and sole 
traders) 
EUR 5000 (for legal 
entities and sole 
traders in repeat 
violations) 

EUR 500 (for 
individuals) 
EUR 1000 (for 
individuals in repeat 
violations) 
EUR 1000 (for legal 
entities and sole 
traders) 
EUR 2000 (for legal 
entities and sole 
traders in repeat 
violations) 

EUR 1000 (for 
individuals) 
EUR 2000 (for 
individuals in repeat 
violations) 
EUR 2500 (for legal 
entities and sole 
traders) 
EUR 5000 (for legal 
entities and sole 
traders in repeat 
violations) 

EUR 100 (for 
individuals) 
EUR 200 (for 
individuals in repeat 
violations) 
EUR 250 (for legal 
entities and sole 
traders) 
EUR 500 (for legal 
entities and sole 
traders in repeat 
violations) 

EUR 100 (for 
individuals) 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EUR 200 (for 
individuals in repeat 
violations) 
EUR 250 (for legal 
entities and sole 
traders) 
EUR 500 (for legal 
entities and sole 
traders in repeat 
violations) 

Not determined 

Not determined 

Not determined 

EUR 2000 
EUR 20 000 in case of 
refusal to pay 

EUR 1500 
EUR 20 000 in case of 
refusal to pay 
EUR 500 

Not determined 

Not determined 

Not determined 

Not determined 

EUR 10 000 
EUR 20 000 in case of 
refusal to pay 
EUR 5000 
EUR 20 000 in case of 
refusal to pay 

EUR 1500 
EUR 20 000 in case of 
refusal to pay 
EUR 500 
EUR 20 000 in case of 
refusal to pay 

EUR 10 000 
EUR 1000 

EUR 20 000 
EUR 5000 

CY 

DAC 2  

Scope ratione materiae 
1) Circumvention of any reporting, due diligence 
or self-certification obligation. 

2) Not keeping the records and underlying 
documents for the customer due diligence 
procedure 

3) Failure to provide access to any records and 
underlying documents for the customer due 
diligence procedure 

Personal scope 
The fines apply to Reporting Financial 
Institutions (legal persons). 
When the fine under 1) above applies for 
circumvention of self-certification, it will apply 
to Account Holders (mostly natural persons) 

Individual / Cumulative application 
The legislative text is inconclusive. On balance, 
it is rather that penalties are cumulatively 
applicable. 
Scope ratione materiae 
1) Failure or refusal by the Reporting Entity to 
submit the CbCR 

2) Failure by the Constituent Entity to notify the 
tax administration that the Ultimate Parent 
Entity has not provided the necessary 
information 

3) Failure to keep the underlying documents for 
the CbC Report 

4) Failure to provide further information for the 
purposes of checking its correctness and 
completeness in the context of CbCR obligations 

Personal scope 
Constituent entities and reporting entities can 
only be legal persons 
Individual / Cumulative application 
Penalties are cumulatively applicable. 
Scope ratione materiae 
1) Failure by the intermediary or the relevant 
taxpayer to report a cross-border arrangement 

84 

DAC 4  

DAC 6  

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
EUR 5000 

EUR 20 000 

EUR 10 000 
EUR 1000 

EUR 20 000 
EUR 5000 

EUR 5000 

EUR 20 000 

2) Late reporting (<90 days overdue) 
3) Late reporting (>90 days overdue) 
4) In case of using the legal professional 
privilege waiver, failure to notify other 
intermediaries or the relevant taxpayer 
5) Late notification of other intermediaries or 
the relevant taxpayer (<90 days overdue) 
6) Late notification of other intermediaries or 
the relevant taxpayer (>90 days overdue) 

Personal scope 
Any natural person or any legal entity that has 
an obligation to report or notify 
Individual / Cumulative application 
Penalties are applicable per (individual) 
infringement or late fulfilment of the 
abovementioned obligations 

CZ 

DAC 2  
DAC 4  

1.  Not providing notification (= no 

reporting): penalty up to CZK 500,000 
= general penalties 

No minimum 
amount 

2.  Not filing or incorrect filing (= wrong 
reporting): penalty up to CZK 1.5 
million = 57.000 EUR 

By any reporting entity 

1.  penalty up to 
CZK 500,000 
(EUR 20,000) = 
general 
penalties (no 
specific 
penalties for 
DAC4) 

2.  penalty up to 

CZK 1.5 million 
(EUR 60.000) = 
general 
penalties (no 
specific 
penalties for 
DAC4) 

DAC 6  

All infractions (absence of reporting, late 
reporting, wrong reporting) 
By any intermediary (natural/legal) 

No minimum 
amount 

Up to CZK 500,000  (EUR 
20,000] = general 
penalties (no specific 
penalties for DAC6) 

DE 

DAC 2  

 

Scope ratione materiae   

Not determined  

Up to 50 000 EUR 

Scenario  2:  No  differentiation  in  fines  for  different 
reporting categories. 

 

 

 

Personal scope: Natural persons / legal 
persons 
Individual / Cumulative application: 
Penalties are applied per person and per 
infringement. 
Scope ratione materiae   

Scenario  2:  No  differentiation  in  fines  for  different 
reporting categories. 

 

Personal scope  

DAC 4  

85 

Not determined 

Up to 10 000 EUR  

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Fines  for  infringement  to  DAC4  only  refers  to  legal 
persons 
 

Individual/Cumulative application: 
Penalties are applied per person and per 
infringement 
Scope ratione materiae   

DAC 6  

 

Scenario  2:  No  differentiation  in  fines  for  different 
reporting categories.  
Incomplete, 
arrangement 
 

late  or  non-filing  of  a  cross-border 

Personal scope natural persons / legal 
persons  

“379 Abs. 2 Nr. 1e bis 1g AO « An administrative 

offence shall be deemed to be committed by any 
person who intentionally or recklessly (…)” 
 

Individual/Cumulative application 

Penalties are applicable per individual infringement of 
obligations under DAC6 
No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
No difference is made between legal and natural 
persons for the purpose of application of penalties. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
No difference is made between legal and natural 
persons for the purpose of application of penalties. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
The fines are based on the financial circumstances of 
the perpetrator, in case he is a natural person. In the 
case of companies the fines are based on the net 
turnover of the company. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
Scope ratione materiae 
Any violation of reporting, self-certification or 
notification obligation 

DK 

DAC 2  

DAC 4  

DAC 6  

EE 

DAC 2  

Personal scope 
Any natural person or any legal entity that has 
reporting, self-certification or notification 
obligation 
Individual / Cumulative application 
Penalties are cumulatively applicable 
Scope ratione materiae 
Any violation of reporting or notification 
obligation 

DAC 4  

Personal scope 

86 

Not determined  

Up to 25 000 EUR  
Sanctions  may  be  reduced  or 
avoided 
if  the  responsible 
intermediary  or  user  can 
provide  evidence  that  she/he 
has  implemented  procedures 
to 
comply  with  DAC  6 
reporting obligations. 
During the retrospective 
period (25 June 2018 to 1 July 
2020) no penalties apply 

No minimum 

No maximum 

No minimum 

No maximum 

No minimum 

No maximum 

Not determined 

EUR 1300 (first violation) 
EUR 2000 (second 
violation) 
EUR 3300 (3+ violations) 

Not determined 

EUR 1300 (first violation) 
EUR 2000 (second 
violation) 
EUR 3300 (3+ violations) 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
Any legal entity that has reporting or 
notification obligation 
Individual / Cumulative application 
Penalties are cumulatively applicable 
Scope ratione materiae 
Any violation of reporting or notification 
obligation 

DAC 6  

Not determined 

EUR 1300 (first violation) 
EUR 2000 (second 
violation) 
EUR 3300 (3+ violations) 

EL  

DAC 2  

Personal scope 
Any natural person or any legal entity that has 
reporting or notification obligation 
Individual / Cumulative application 
Penalties are cumulatively applicable 
Art. 54c of the Greek Code of Tax Procedures - 
sanctions on the financial institutions (no 
personal distinctions) for:  
a) Late reporting of information on each 
reportable account. 
b) A failure to report information on each 
reportable account.  

c) A filing of inaccurate or incomplete 
information on each reportable account.  
d) A failure to respond to a request from the Tax 
Administration either to provide information or 
data or to complete or correct information or 
data relating to each reportable account within 
the time limit.  
e) Each failure to cooperate during the audit to 
comply with the rules on reporting and due 
diligence. 
f) Each failure to comply with the obligations to 
submit information on each reportable account 
in accordance with the reporting and due 
diligence rules within the time limit following a 
tax audit. 

87 

a) as minimum (fixed) 

b) as minimum (fixed) 
c) as minimum (fixed) 

d) as minimum (fixed) 
e) as minimum (fixed) 

f) as minimum (fixed) 

If the Greek Reporting 
Financial Institutions 
commit the same 
infringement within five 
years from the discovery 
of the first infringement, 
the aforesaid penalties 
(provided under a)-f)) 
shall be doubled. In case 
the same infringement is 
repeated, for each 
subsequent infringement 
the said penalties shall be 
quadrupled. 

a) EUR 100 per 
reportable account 
b) EUR 300 per 
reportable account  
c)  EUR 300 per 
reportable account 

d)  EUR 1,000 per 
reportable account  
e) EUR 2,500 

f)  EUR 5,000. 

If the Reporting 
Greek Financial 
Institutions 
voluntarily and 
within a period of 3 
months, starting 
from the expiration 
of the deadline for 
submitting such 
information to the 
competent Tax 
Administration 
Service, correctly 
amend or complete 
the information on 
each reportable 
account covering the 
cases provided 
under a), b), c), they 
shall be treated as 
not having 
committed a 
violation and no fine 
shall be imposed. 
If the Reporting 
Greek Financial 
Institutions - 
following an audit or 
upon notification of 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
the competent 
foreign authority- 
correctly amend or 
complete the 
information for each 
reportable account 
concerning the cases 
provided under a), 
b), c), within the 
deadline, the 
corresponding fines 
shall be halved, but 
only if the 
infringement is 
related to the years 
2017 and 2018. 

A) EUR 10,000 
B) EUR 20,000 

A) as the minimum (fixed) 
B) as the minimum (fixed) 

A) EUR 10,000 

B) EUR 5,000 

C) EUR 500 per 
month of delay up to 
three months. Once 
the three month-
period expires, a 
penalty is EUR 5,000 
per reportable cross-
border arrangement.  

A) The sum of penalties 
shall not exceed the 
amount of EUR 100,000 
per tax audit for each 
reportable cross-border 
arrangement. 
B)  The sum of penalties 
shall not exceed the 
amount of EUR 50,000 per 
tax audit for each 
reportable cross-border 
arrangement. 

C) The sum of penalties 
shall not exceed the 
amount of EUR 10,000 per 
year for each reportable 
cross-border 
arrangement. 

 EUR 100,000 per tax audit 
for each reportable cross-
border arrangement 

Infractions by the financial 
institutions 

DAC 4  

DAC 6  

Art. 56A of L. 4174/2013 (Greek Code of Tax 
Procedures) - sanctions for CbC reporting (no 
personal distinctions):  
A) A filing of an inaccurate report or a belated 
filing of the report. 
B) A failure to submit a country report.   

Art. 56A of L. 4174/2013 (Greek Code of Tax 
Procedures) - sanctions for MDR violation (no 
personal distinctions):  
A)  A failure to report information regarding a 
reportable cross-border arrangement.  

B) A filing of inaccurate or incomplete 
information in respect of a reportable cross-
border arrangement.  

C) Late reporting regarding a reportable cross-
border arrangement. 

Specific sanction on intermediaries: 

 EUR 10,000 

- 

 If the intermediary fails to notify 
another intermediary or the taxpayer 
for the duty of filing information 

ES 

DAC 2  

Infractions by the financial institutions 

Sanctions are per 
single infringement 
and calculated per 
missing/erroneous/f

1.  No reporting (LGT 198.1) 

88 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
2. 

 Late reporting (LGT 198.2) 

3. 

 Wrong reporting (LGT 199.4 y 5) 

4. 

 No identification of the residence of 
the account holder (LGT AD 22.3) 

Infractions by account holders 

1. 

 Wrong reporting to the financial 
institution (LGT AD 22.3) 

DAC 4  

Infractions by reporting entity 

1.  No reporting (LGT 198.1) 

2. 

Late reporting (LGT 198.2) 

3.  Wrong reporting (LGT 199.4 y 5) 

89 

1.  20 000€ 

2.  10 000€ 

3.  Non-monetary 
magnitude: 
200€ per data 
per person; 
monetary 
magnitude: 2% 
magnitude  

4.  200€ per person 

Infractions by account 
holder 

1.  300€ 

Infraction by reporting 
entity 

1.  20 000€ 

2.  10 000€ 

3.  Non-monetary 
magnitude: 
200€ per data 
per person; 
monetary 
magnitude: 2% 
magnitude 

ake data in the same 
infringement 
Infraction by 
financial institutions 
1.  20€ per 
data per 
person, 
minimum 
300€ 
2.  10€ per 
data per 
person, 
minimum 
150€ 
3.  Non-

monetary 
magnitude
: 200€ per 
data per 
person; 
monetary 
magnitude
: 0,5% 
magnitude
, minimum 
€500 
4.  200€ per 

person 

Infractions by 
account holder 
1.  300€ 

Sanctions are per 
single infringement 
and calculated per 
missing/erroneous/f
ake data in the same 
infringement 

Infraction by 
reporting entity 

1.  20€ per 
data per 
person, 
minimum 
300€ 
2.  10€ per 
data per 
person, 
minimum 
150€ 
3.  Non-

monetary 
magnitude
: 200€ per 
data per 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
person; 
monetary 
magnitude
: 0,5% 
magnitude
, minimum 
€500 

Sanctions are per 
single infringement 
and calculated per 
missing/erroneous/ 
fake data in the 
same infringement 
Infractions by 
intermediary or 
relevant taxpayer 

1.  2 000€ per 
data, 
minimum 
4 000€ 
2.  1 000€ per 
data, 
minimum 
2 000€ 
3.  2 000€ per 
data, 
minimum 
4 000€ 
 250€ per 
data, 
minimum 
750€ 

4. 

5.  600€ (If as 
result 
there is no 
declaratio
n, see 
above 1) 

Infractions by 
intermediaries 
1.  600€ 
EUR 2.000 (not a 
deductible expense for 
tax purposes + interest 
and charges in case of 
late payment) 

Infractions by 
intermediary or relevant 
taxpayer 

1.  The highest of 

professional fee 
or 4 000€ 
2.  Half of the 
highest of 
professional fee 
or 4 000€ 
3.  The highest of 

professional fee 
or 4 000€ 

4.  1 500€ 

5.  600€ (If as result 
there is no 
declaration, see 
above 1) 

Infractions by 
intermediaries 
1.  600€ 

EUR 15.000 (not a deductible 
expense for tax purposes + 
interest and charges in case 
of late payment) 

EUR 2.000 (not a 
deductible expense for 
tax purposes + interest 

EUR 15.000 (not a deductible 
expense for tax purposes + 

DAC 6  

Infractions by intermediary or relevant taxpayer 

1.  No reporting (LGT AD 23.4 a) 
2. 
Late reporting (LGT AD 23.4 a) 
3.  Wrong reporting (LGT AD 23.4 B) 

4.  Non-reporting by electronic means 

(LGT AD 23.4 c) 

5.  Non-communication to other 

intermediaries or taxpayers of the 
submission of the declaration (LGT AD 
24.3 b) 

Infractions by intermediaries 

1.  Non-communication of professional 

waiver (LGT AD 24.3 a) 

FI 

DAC 2  

DAC 4  

Non-compliance/negligence penalty: 
Material scope: failure to report, late reporting, 
false/inaccurate reporting, failure to correct errors 
despite explicit request, report/information provided 
in a manner other than prescribed by law or Tax 
Administration. 
Personal scope: Financial institutions (liable to report 
under Directive 2011/16/EU as amended by DAC2 
[Directive (EU) 2015/2376]). 
The legislation does not explicitly indicate if the 
penalty applies per individual / cumulative 
infringements (however, there is no reason to expect 
that it could not be enforced breach-by-breach). 
Non-compliance/negligence penalty: 
Material scope: failure to report, late reporting, 
false/inaccurate reporting, failure to correct errors 

90 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
and charges in case of 
late payment) 

interest and charges in case 
of late payment) 

 10% of the increased 
income, capped at EUR 
25.000. 

(0.5% - 3%) 
commonly 2% of the 
increased income 
depending on 
gravity of 
offense/negligence, 
whether it is 
repeated and on 
whose initiative 
correction is made. 

EUR 2.000 (not a 
deductible expense for 
tax purposes + interest 
and charges in case of 
late payment) 

EUR 15.000 (not a deductible 
expense for tax purposes + 
interest and charges in case 
of late payment) 

 10% of the increased 
income, capped at EUR 
25.000. 

(0.5% - 3%) commonly 
2% of the increased 
income depending on 
gravity of 
offense/negligence, 
whether it is repeated 
and on whose initiative 
correction is made. 

despite explicit request, report/information provided 
in a manner other than prescribed by law or Tax 
Administration. 
Personal scope: Reporting entities (as defined in 
Directive 2011/16/EU as amended by DAC4 [Directive 
(EU) 2016/881]) 
The legislation does not explicitly indicate if the 
penalty applies per individual / cumulative 
infringements (this however suggest that there is no 
reason to expect that it could not be enforced breach-
by-breach). 
Tax increase (in addition to the above penalty): 
Material scope: the issuer of the declaration or the 
country-by-country report has failed to fulfil its 
obligation within the prescribed time limit or has 
fulfilled it as materially incomplete or incorrect. Tax 
increase shall not be imposed if the non-compliance is 
minor or where there is a valid reason for it or if, the 
matter is open to interpretation or ambiguous and 
imposition of the tax increase would therefore be 
disproportionate. 
Personal scope: Reporting entities (as defined in 
Directive 2011/16/EU as amended by DAC4 [Directive 
(EU) 2016/881]) 
The legislation does not explicitly indicate if the tax 
increase applies per individual / cumulative 
infringements. This however suggest that there is no 
reason to expect that it could not be enforced breach-
by-breach, notably because repeat offenses are taken 
into account in determining minimum amount of tax 
increase. 
Non-compliance/negligence penalty: 
Material scope: failure to report, late reporting, 
false/inaccurate reporting, failure to correct errors 
despite explicit request, report/information provided 
in a manner other than prescribed by law or Tax 
Administration. 
Personal scope: Intermediaries (advisers); relevant 
taxpayers (users of the reportable arrangements) 
The legislation does not explicitly indicate if the 
penalty applies per individual / cumulative 
infringements (this however suggest that there is no 
reason to expect that it could not be enforced breach-
by-breach). 
Tax increase (in addition to the above penalty): 
Material scope: failure to report, late reporting, 
false/inaccurate reporting, failure to correct errors 
despite explicit request, report/information provided 
in a manner other than prescribed by law or Tax 
Administration. Tax increase shall not be imposed if 
the non-compliance is minor or where there is a valid 
reason for it or if, the matter is open to interpretation 
or ambiguous and imposition of the tax increase 
would therefore be disproportionate. 
Personal scope: Relevant taxpayers (end users of the 
reportable arrangements) 
The legislation does not explicitly indicate if the tax 
increase applies per individual / cumulative 
infringements. This however suggest that there is no 
reason to expect that it could not be enforced breach-
by-breach, notably because repeat offenses are taken 
into account in determining minimum amount of tax 
increase. 
 

Scope ratione materiae (article 1649 AC of 
Code général des impôts)  

91 

DAC 6  

FR 

DAC 2  

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Failure to report / Late Reporting / Omitted or 
Erroneous information 

- 
- 

Failure to report / Late report  
Omitted information / Erroneous 
information  

 

Personal scope: Financial institutions 

- 
- 

EUR 150  
EUR 200 

Penalties are not applicable to  financial institutions  if 
they can prove that the infringement results from the 
client’s refusal  to  provide  the  requested information.  
Financial 
tax 
institutions 
administration about such refusal.  
Individual / Cumulative  

inform 

should 

the 

 

Sanctions are cumulative and applicable per reportable 
account  

DAC 4  

Scope ratione materiae 

 
1.  Not filing CbC report (no reporting) 
2.  Wrong or late reporting 

No minimum 
amount 

 

Personal scope:  

By any reporting entity falling into the scope 

 

Individual / Cumulative:   

National legislation only mentions that penalties are 
applicable per each declaration/per each fiscal year.  

DAC 6  

 

Scope ratione materiae 

All infractions (absence of reporting, late reporting, 
wrong reporting) 

No minimum 
amount 

1. 

2. 

penalty Up to EUR 
100,000 
no penalty 

Up to EUR 10,000 by 
infraction. 
The amount of the fine 
cannot exceed EUR 5,000 for 
the first offense in the 
current calendar year and in 
the three preceding years. 

 From HRK 2000 
(EUR 266) 

TO HRK 200.000 
(EUR26.638) 

HRK 2000 (EUR 266) 

To HRK 20.000 

From HRK 2000 (EUR 
266) 

To HRK 200.000 
(EUR26.638) 

HR 

DAC 2  

DAC 4  

 

 Personal scope 

By any intermediary (natural/legal) 
Individual / Cumulative 

 

For the same intermediary /taxpayer, penalties are 
cumulatively applicable within the limit of EUR 
100,000 per calendar year. 

 

Rationae personae: a legal person  

Rationae materiae: Penalties are applied to a legal 
person if it fails to comply with the obligations as 
transposed into Croatian law from DAC2 (does not 
collect the info that is subject to the reporting 
requirements, does not provide for in depth analysis, 
does not provide info to the competent authority with 
regard to reportable accounts, does not provide info 
in a timely manner,...). 

 

Rationae personae: penalty is provided 
also for the responsible person  (individual) 
in the financial institution, which is in 
breach of the above  

Nothing is stated in the Croation legislation as to the 
application of penalties per individual infringement or 
cumulative for a number of infringements. When 
reading the legislation I would tend to think it is a 
cumulative penalty (and then depending on the 
severity, number of inf. adjusted accordingly). 
Rationae personae:  

 

Penalty for a legal person  
Rationae materiae: Penalties are applied to a legal 
person if it fails to comply with the obligations as 
transposed from DAC4 into the Croatian law. 
Nothing is stated in the Croatian legislation as to 
individual or cumulative application of penalties. 
When reading the legislation I would tend to think it is 

92 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
DAC 6  

HU 

DAC 2 

DAC 4 

DAC 6 

IE 

DAC 2  

a cumulative penalty (and then depending on the 
severity, number of inf. adjusted accordingly). 

Material scope: 
Penalties are applied when failure to comply with the 
obligations as transposed from DAC6  
Personal scope:  

 
 

 

Penalty for a legal person  
Penalty for a responsible person 
(individual) in the legal entity 
Penalty for a natural person 

Nothing is stated in the Croatian legislation as to 
individual or cumulative application of penalties. 
When reading the legislation I would tend to think it is 
a cumulative penalty (and then depending on the 
severity, number of inf. adjusted accordingly). But this 
I understand to be enforced within a certain time 
frame, and then can be of course repeated. 
Scope ratione materiae 
Failure of the Financial Institution to notify its 
status as a financial institution to the tax 
authority; failure of the financial institution to 
report 
Personal scope 
Only Reporting Financial Institutions, which are 
legal persons is their vast majority. No fines are 
present in the notified legislation for failure by 
the account holder or the Passive Non-Financial 
Entity to provide valid self-certifications. 
Individual / Cumulative application 
Penalties are cumulatively applicable 
Scope ratione materiae 
Failure to submit the CbC Report; failure to 
notify the tax administration of the designation 
of the reporting entity of the MNE Group 
Personal scope 
Constituent entities and reporting entities can 
only be legal persons 
Individual / Cumulative application 
Penalties are cumulatively applicable 
Scope ratione materiae 
Failure to report; failure to notify other 
intermediaries or the relevant taxpayer; late, 
incorrect, false or incomplete reporting. 

Personal scope 
Any natural person or any legal entity that has 
an obligation to report or notify 
Individual / Cumulative application 
Penalties are cumulatively applicable 
No reporting, wrong reporting and partial reporting 
are explicitly mentioned as punishable. What is 
punishable also is the “failure to comply with any of 
the obligations” concerning the provision of 
information. This would appear to cover also late 
reporting and on purpose wrong reporting.  

93 

From HRK 2000 (EUR 
266)  
2000 (EUR 266) 
HRK 1000 (EUR 133) 

To HRK 200.000 
(EUR26.638) 
To HRK 20.000  
HRK 100.000 (EUR 13.300) 

Not determined 

EUR 5450 

Not determined 

EUR 54.500 

Not determined 

EUR 1360 + invitation to 
comply 
EUR 13600 in case of no 
compliance after the 
invitation to comply 

Fixed penalty for 
failure to fulfil an 
obligation under 
DAC2 is EUR 19,045, 
plus EUR 2,535 for 

Fixed penalty for failure to 
fulfil an obligation under 
DAC2 is EUR 19,045, plus 
EUR 2,535 for each day 
the failure continues. 

 
 
 
 
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
each day the failure 
continues.  

Fixed penalty for 
failure to file a CbC 
Report / Equivalent 
CbC Report is EUR 
19,045, plus EUR 2,535 
for each day the failure 
continues. The penalty 
for filing an incomplete 
or incorrect CbC Report 
/ Equivalent CbC 
Report is EUR 19,045. 
No minimum for the 
initial breach of 
obligations. 

Fixed penalty for failure to file 
a CbC Report / Equivalent CbC 
Report is EUR 19,045, plus 
EUR 2,535 for each day the 
failure continues. The penalty 
for filing an incomplete or 
incorrect CbC Report / 
Equivalent CbC Report is EUR 
19,045. 

The penalties are EUR 
4.000/5.000 for the initial 
breach of obligations and EUR 
100/500 per day as long as 
the breach continues after 
the initial penalty (PS: it 
would seem a good idea that 
DAC8 would introduce per 
diem penalties as well). 

From 2,000 EUR 

21,000 EUR 

From 10,000 EUR  

50,000 EUR 

1. 

2. 

From 3,000 
EUR 
From 1,000 
EUR 
3.  Heavier 
sanction 
increased of 
a quarter 

4.  Not defined   

1. 
31,5000 EUR 
2. 
10,500 EUR 
3.  Heavier sanction 
increased of 
double   

4.  Not defined 

IT 

DAC 4  

DAC 6  

DAC Art. 9 
as 
implement
ed by 
Article 9 of 
Law 
n.95/2015 
(FATCA)  
DAC 4 as 
implemente
d by Article 
145 of Law 
208/2015 

DAC 6 as 
implement
ed by 
Article 12 
of 
Legislative 
Decree. n. 
100/2020 

No difference is made between legal and natural 
persons for the purpose of application of penalties.  
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
No reporting, late reporting, wrong reporting and 
partial reporting are covered. No distinction is made 
between on purpose wrong reporting and wrong 
reporting. 
No difference is made between legal and natural 
persons for the purpose of application of penalties. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 

No reporting, late reporting, on purpose wrong 
reporting and partial reporting are not explicitly 
mentioned as punishable. What is punishable is the 
“failure to comply with any of the obligations” 
concerning the provision of information. This would 
appear to cover no reporting, late reporting, on 
purpose wrong reporting and partial reporting.  
No difference is made between legal and natural 
persons for the purpose of application of penalties. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
Material:  Violations  (omission,  incomplete,  false)  of 
reporting obligations.  
Personal:    financial  intermediaries  (Article  10,1  of 
Legislative Decree n. 471/1997) 
Individual/cumulative  application: 
Italian 
legislation  does  not  provide  details  on  whether 
penalties  apply  per 
infringement  or 
cumulative for a number of breaches together.  

individual 

the 

Material: Violations (omission, incomplete and false) 
reporting obligations  
Personal:  the controlling company of the MNE in Italy 
Individual/cumulative application:  the Italian 
legislation does not provide details on whether 
penalties apply per individual infringement or 
cumulative for a number of breaches together.  
Material scope:  
1. 
2. 

 Failure to report   
Incomplete reporting (with a reduction to 
50% if the reporting of the cross-border 
arrangement is filed within 15 days of the 
deadline) 

3.  Multiple violations (Article 12 of Legislative 

Decree no. 472/1997) the sanction to be 
imposed for the most serious infringement 
is increased by between  
In case of Voluntary amendment, a 
reduction is provided for. 

4. 

Personal  scope:  by  intermediary  or  taxpayer.  Where 
the  intermediary  is  a  company  or  entity  with  legal 
personality,  the  penalties  are  imposed  on  the  legal 
entity, itself.  If the infringement is made by an entity 
without legal personality, the penalties are imposed on 
the individual who is required to report. That person is 
the  professional 
the 

in  charge  of 

individual 

94 

 
 
 
 
 
 
  
  
  
  
the 

individual 

engagement  relating  to  the  reportable  cross-border 
arrangement. 
Individual/cumulative  application: 
Italian 
legislation  does  not  provide  details  on  whether 
penalties  apply  per 
infringement  or 
cumulative for a number of breaches together.  
Scope ratione materiae 
Failure to provide information or provision of 
incorrect information to the financial institutions 
Late submission of information to the tax authorities 
by the financial institution 
Failure to provide information to the tax authorities 
by the financial institution 
Personal scope 
No differentiation between legal entities or natural 
persons for application of penalties, except the above 
penalties for financial institutions (legal entities) 
Individual / Cumulative application 
Penalties per individual infringement and person 
Scope ratione materiae 
Failure to provide information, provision of late or 
incorrect information 
If the above violations committed with intention to 
avoid taxes 
Personal scope 
The wording of the article is general, without 
differentiation between legal entities or natural 
persons for application of these penalties, but in 
practice it applies only to legal persons 
Individual / Cumulative application 
Penalties per individual infringement and person.  
Scope ratione materiae 
Failure to provide information, provision of late or 
incorrect information 
If the above violations committed repeatedly  
Personal scope 
No differentiation between legal entities or natural 
persons for application of penalties 
Individual / Cumulative application 
Penalties per individual infringement and person. 
Scope ratione materiae  
From 01/01/2016 to 31/12/2020 - article 3 here 

 

LT 

DAC 2  

DAC 4  

DAC 6  

LU 

DAC 2  

500 EUR 

390 EUR 
780 EUR 

2400 EUR 

730 EUR 
1950 EUR 

Warning or 200 EUR 
200 EUR 

300 EUR 
6000 EUR 

1820 EUR 
3770 EUR 

5590 EUR 
6000 EUR 

From 01/01/2016 to 
31/12/2020  

From 01/01/2016 to 
31/12/2020  

- 

- 

Omitting to file the required report or if it 
files a late, incomplete or inaccurate report 

EUR 1 500 

Omitting to comply with due diligence 
rules or to introduce procedures in view of 
reporting  

Up to 0,5 % of the amount 
that should have been 
reported 

Up to EUR 250,000. 

From 01/01/2021  
No minimum amount  

From 01/01/2021 
10 000 EUR  

Up to 250 000 EUR + 0,5 % of 
the amount that should have 
been reported 

After 01/01/2021 - here 

- 

- 

 

 

Failure to submit a file within the legal 
deadline 

Omitting to file the required report or if it 
files a late, incomplete or inaccurate report 

Personal scope: Financial institutions  

Individual / Cumulative: Not explicit - it 
appears applicable per infringement / per 
person  

95 

 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Maximum of EUR 250,000 by 
infraction. 
No cumulative maximum in 
case of multiple infractions 

Maximum of EUR 250,000 by 
infraction. 

Legislative work states that 
the level of the penalty 
imposed will depend on the 
facts and circumstances of 
the case (i.e. Intentional 
breach, page 26 here).  

Fine of up to 1% of annual 
turnover, but not exceeding 
14 000 EUR 

Fine up to 3200 EUR 

Fine up to 3200 EUR 

DAC 4  

 

Scope ratione materiae  

No minimum amount 

All infractions (absence of reporting, late reporting, 
wrong reporting) 

 

 

Personal scope: By any reporting entity 

Individual / Cumulative:  Not explicit in the 
national legislation, it appears applicable 
per infringement / per person  

DAC 6  

 

Scope ratione materiae  

No minimum amount 

LV 

DAC 2  

DAC 4  

DAC 6  

MT 

DAC 2  

All infractions (absence of reporting, late reporting, 
wrong reporting) 

 

 

Personal scope: By any intermediary 
(natural/legal) 

Individual / Cumulative: Not explicit in the 
national legislation – it appears applicable 
per infringement / per person  

Scope ratione materiae 
Violation of reporting obligations by reporting entity 
Personal scope 
Financial establishments  
Individual / Cumulative application 
Unclear, but seems that the penalty is applied per 
individual infringement and person 
Scope ratione materiae 
Violation of reporting obligations by reporting entity 
Personal scope 
Legal entities  
Individual / Cumulative application 
Penalties per individual infringement and person 
Scope ratione materiae 
Violation of reporting obligations by reporting person 
or entity 
Personal scope 
No differentiation between legal entities or natural 
persons for application of penalties 
Individual / Cumulative application 
Penalties per individual infringement and person 
Personal scope: Financial Institution (FI) only 
Material scope:  
1) non-submission, inaccurate submission: 

2) a) a failure to report in a complete and 
accurate manner: if minor error  

2) b) If continual and repeated administrative or 
minor errors then they will be considered as 
non-compliance 
3) significant non-compliance (e.g. repeated 
failure to file a return or repeated late filing, 
ongoing or repeated failure to register, supply 
accurate information or established appropriate 
governance or due diligence processes, the 

96 

Max EUR 20.000 

Max EUR 5.000 

Max 50.000 

1) EUR 2500  and 
EUR 100 for every 
day during which the 
default existed, 
provided that this 
penalty shall not 
exceed in total EUR 
20000 

2)a) EUR 200 and 
EUR 50 for every day 
during which the 
default existed, 
provided that this 
penalty shall not 
exceed in total EUR 
5000 

 
 
 
 
 
  
  
  
  
  
  
  
  
   
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
DAC 4  

DAC 6  

intentional provision of substantially incorrect 
information, the deliberate or negligent 
omission of required information 
The way legislation is drafted I would conclude 
it is a cumulative penalty (e.g. having a special 
provision for significant non-compliance-
repeated failure to file a return). 
Personal scope: Maltese constituent entity only 
Material scope: Failure to comply with any of 
the obligations under DAC4: 
A) failure to retain documentation and 
information collected when meeting its 
reporting obligations 

B) failure to report  within deadline 

C) incomplete or inaccurate reporting: 

 

If minor errors 

 

If significant non-compliance 

D) when not complying with a request for 
information by the Maltese tax administration 

Recent amendments (Legal Notice 213/2021), 
which were not part of the NIM added 
additional penalties for failure to submit a 
notification letter in accordance with Maltese 
rules implementing CbC Reporting: 

 

 

failure to notify the identity and tax 
residence of the reporting entity 
obliged to file CbC report 
Failure to notify if it is the Ultimate 
Parent Entity of the Surrogate Parent 
Entity or the Constituent Entity  

The way legislation is drafted I would conclude 
it is a cumulative penalty (e.g. having a special 
provision for significant non-compliance). 

Personal scope: an intermediary or a relevant 
taxpayer  (this can be either natural or legal 
person) 
Material scope: failure to comply with their 
obligations under the mandatory automatic 
exchange of information regime in relation to 
cross-border arrangements: 
Different levels of penalties are applicable with 
respect to the below failures: 
 • failure to collect and retain documentation 
for a period of five years; 

 • failure to report information on a timely basis  

97 

2)b) as under 1) 

3) EUR 50.000 

EUR 2.500 

EUR 200 and EUR 
100 for every day 
during which the 
default existed, up 
to a max. of EUR 
20.000 
EUR 200 and EUR 50 
per day during which 
the default existed, 
but up to max EUR 
5000 

EUR 50.000 

EUR 1000 and EUR 
100 for every day 
during which default 
existed but up to 
EUR 30.000 

EUR 200 and EUR 50 
for every day during 
which the default 
existed, up to a 
maximum of EUR 
5.000 

EUR 20.000 

EUR 5000 

EUR 50.000 

EUR 30.000 

Max EUR 5000 

• penalty of EUR 
2,500  

• a penalty of EUR 
200; and EUR 100 
for every day during 
which the default 
existed: provided 
that this penalty 

Max EUR 20 000 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
shall not exceed in 
total EUR 20,000.  

Ib 

• EUR 200 and 
EUR 100 for every 
day during which the 
default existed: 
provided that this 
penalty shall not 
exceed in total EUR 
20,000.  

• EUR 1,000 and 
EUR 100 for every 
day during which the 
default existed, 
provided that this 
penalty shall not 
exceed in total EUR 
30,000. 
No minimum 

Max EUR 30.000 

Maximum EUR 21.750 

No minimum 

Maximum EUR 870.000 

No minimum 

Maximum EUR 870.000 

No minimum 
amount 

Administrative penalty up 
to PLN 1,000,000 (EUR 
217,850) 

No minimum 
amount 

Administrative penalty up 
to PLN 1,000,000 (EUR 
217,850) 

• failure to report information in a complete 
and accurate manner;  

• failure to comply with a request made by the 
Maltese tax authorities  

Not stated whether individual or cumulative 
nature of penalty. 

No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
No difference is made between legal and natural 
persons for the purpose of application of penalties  
The fine must be proportionate to the seriousness of 
the offence. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
No difference is made between legal and natural 
persons for the purpose of application of penalties  
The fine must be proportionate to the seriousness of 
the offence. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
No reporting, late reporting, on purpose wrong 
reporting and partial reporting are all explicitly 
mentioned as punishable.  
No difference is made between legal and natural 
persons for the purpose of application of penalties  
The fine must be proportionate to the seriousness of 
the offence. 
The law does not say whether the penalties are per 
individual infringement or for cumulative 
infringements. 
Incorrectness of reporting by the obliged 
financial institution:  

 

 

no strict differentiation between 
various types of incorrectness, but 
the gravity of incorrectness should be 
considered in determination of the 
penalty 

Incorrectness of reporting by the obliged 
taxpayer:  
 

no strict differentiation between 
various types of incorrectness, but 

98 

NL 

DAC 2  

DAC 4  

DAC 6  

PL 

DAC 2  

DAC 4  

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
DAC 6  

 

the gravity of incorrectness should be 
considered in determination of the 
penalty 

Two types of incorrectness: 
1) “Qualified form” for promotors (advisers) of 
the schemes who have more than PLN 
8,000,000 revenue from tax advisory services 
(EUR 1,740,000) - who are obliged to establish 
internal procedure ensuring correct 
implementation of MDR and failed to do so, 

No minimum 
amount 

2) Any other incorrectness in reporting (no 
personal distinctions) 

No minimum 
penalty (but see 
calculation of daily 
rates) 

PT 

DAC 2  

DAC 4  

DAC 6  

Infractions by the financial institutions 

1.  No reporting 

2. 

 Late reporting 

3. 

 Wrong reporting 

4. 

 Non-compliance with due diligence 
procedures 

Infractions by the reporting entity 

1.  No reporting 
2. 

Late reporting 

Infractions by intermediary or relevant taxpayer 

1.  No reporting 
2. 
Late reporting 
3.  Wrong reporting 
4.  No reply to request of additional 

information 

99 

Sanctions are per 
single infringement  
Infractions by the 
financial institutions 
1.  1 000€ 

2.  1 000€ 

3.  500€ 

4.  500€ 

Sanctions are per 
single infringement 
Infractions by 
reporting entity 
1.  500€ 
2.  500€ 

Sanctions are per 
single infringement  
Infractions by 
intermediary or 
relevant taxpayer 
1.  6 000€ 
2.  6 000€ 
3.  2 000€ 
4.  3 000€ 

1) Administrative penalty 
up to PLN 2,000,000 (EUR 
435,000) 
The maximum amount 
may be increased to PLN 
10,000,000 (EUR 
2,175,000) if the 
employee was sentenced 
in a tax criminal case for 
promoting tax fraud 
(evasion) 

2) Criminal penalty - fine 
up to 720 daily rates (1 
rate shall be in the 
brackets: from 1/30 
average wages to 400x 
average brackets) 

- 

The average 
salary in 2021 is 
PLN 5800 (EUR 
1,300). 

Infractions by the financial 
institutions 

1.  45 000€ 

2.  45 000€ 

3.  22 500€ 

4.  22 500€ 

Infractions by reporting 
entity 

1.  500€+additional 
5% for each day 
of delay 

2.  500€+additional 
5% for each day 
of delay 

Infractions by 
intermediary or relevant 
taxpayer 

1.  80 000€ 
2.  80 000€ 
3.  60 000€ 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
5. 

Late reply to request of additional 
information 

5.  3 000€ 

4.  80 000€ 
5.  80 000€ 

RO 

DAC 2  

DAC 4  

DAC 6  

SE  

DAC 2  

DAC 4  

The non-transmission, by the Financial 
Institutions, at the deadline provided by law, of 
the information related to the non-resident 
taxpayers or the transmission of incorrect or 
incomplete information 

1) The late submission by the reporting entities 
of the report for each country or the 
transmission of incorrect or incomplete 
information 
2) The failure of the reporting entities to submit 
the report for each country 
1) Non-reporting or late reporting by the 
relevant intermediaries or taxpayers, as the 
case may be, of the cross-border arrangements 
subject to reporting 
2) Failure of the intermediary to comply with 
the obligation to notify another intermediary or 
the relevant taxpayer 
Documentation fee/penalty 
Material scope: failure to collect and keep documents, 
data and other documentation relating to a financial 
account (in the manner specified in the law 2015:911 
on the identification of reportable accounts in the 
event of automatic exchange of financial account 
information) 
 Personal scope: Financial institutions (liable to report 
under DAC2) 
The legislation explicitly indicates that the fee/penalty 
applies per each account in respect of which a breach 
is committed.  
Penal code sanctions 
Material scope: false / inaccurate reporting.  
NB! Under ordinance (2015:921) a certification for 
identification of reportable accounts shall be made on 
honour. Provision of false information (on honour and 
when it undermines evidence) is sanctioned in the 
penal code 1962:700 by a fine or imprisonment 
(unlikely to be applied in this context save in very 
exceptional situations). 
Personal scope: Financial institutions (liable to report 
under DAC2) and their representatives in charge 
(individuals). 
Legislation does not explicitly indicate if these 
penalties apply per individual / cumulative 
infringements. 
Injunction with fixed/periodic penalty 
Material scope: Failure to report. Injunctions and, 
fixed or periodic penalties attached to them, shall 
apply if a country-by-country report is not submitted. 
Personal scope: Reporting entities (as defined in 
Directive 2011/16/EU as amended by DAC4 [Directive 
(EU) 2016/881]). 
The legislation does not explicitly indicate if the fixed 
penalty applies per individual / cumulative 
infringements. However, there is no reason to expect 
that it could not be enforced breach-by-breach. 
Moreover, repeat offenses can be taken into account 

100 

RON 1 000 
for legal entities classified 
in the category of medium 
and large taxpayers  RON 
5 000   

 RON 500 
for legal entities 
classified in the 
category of medium 
and large taxpayers  
RON 1 000 
1) RON 30 000                                    
2) RON 70 000 

1) RON 50 000                                                   
2) RON 100 000 

1) RON 100 000 
1) RON 20 000                                                                                       
2) RON 5 000 

3) RON 30 000 

SEK 7.500 (EUR 731) 

SEK 7.500 (EUR 731) 

 SEK 5.000 (EUR 487) 
legal persons 
Fines for individuals 
depend on income 
level (unspecified). 

SEK 10.000.000 (EUR 
975.000) legal persons 
Fines for individuals depend 
on income level (unspecified). 
Individuals also risk (in 
theory) imprisonment up to 2 
years. 

Unspecified. The 
fixed/periodic penalty 
shall be set at an 
amount which, in view 
of addressee’s 
economic situation and 
other circumstances, is 
likely to induce 
compliance with the 
injunction.  

Unspecified. The 
fixed/periodic penalty shall 
be set at an amount which, in 
view of addressee’s economic 
situation and other 
circumstances, is likely to 
induce compliance with the 
injunction. 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
DAC 6  

in determining the amount of the penalty or to 
impose a periodic penalty attached to the injunction. 
Tax increase (in addition to the above penalty): 
Material scope: materially incomplete or incorrect 
country-by-country report. 
Personal scope: Reporting entities (as defined in 
Directive 2011/16/EU as amended by DAC4 [Directive 
(EU) 2016/881]) 

Penalty fee 1 
Material scope: Failure to report, incomplete or 
incorrect reporting. 
Personal scope: Intermediaries (advisers); relevant 
taxpayers (users of the reportable arrangements) 
The legislation explicitly provides that the penalty fee 
(1) applies per each individual reportable 
arrangement and each quarterly report required. 
Penalty fee 2 
Material scope: Late (over 60 days) reporting. 
Personal scope: Intermediaries (advisers); relevant 
taxpayers (users of the reportable arrangements) 
The legislation does not explicitly indicate if the 
penalty fee (2) applies per individual / cumulative 
infringements. However, there is no reason to expect 
that it could not be enforced breach-by-breach. 
NB! The penalty (2) is fixed at SEK 20.000 (advisers) 
and SEK 10.000 (users) but if the infringement is 
committed in the course of the economic activity of 
the adviser/user liable to report, the amount of the 
penalty depends on the turnover in the previous 
financial year: 
Turnover at least SEK 15.000.000 (EUR 1.462.415) but 
under SEK 75.000.000 (EUR 7.312.079): 
 SEK 30.000 (EUR 2.925) advisers 
 SEK 15.000 (EUR 1.462) users 
Turnover at least SEK 75.000.000 (EUR 7.312.079) but 
under SEK 500.000.000 (EUR 48.747.197): 
 SEK 60.000 (EUR 5.850) advisers 
 SEK 30.000 (EUR 2.925) users 
Turnover at least SEK 500.000.000 (EUR 48.747.197): 
 SEK 150.000 (EUR 14.624) advisers 
 SEK 75.000 (EUR 7.312) users 
Should the length of the previous financial year differ 
from 12 months the amounts of the penalties are 
adjusted pro-rata accordingly. 
Legislation does not explicitly indicate if these 
penalties apply per individual / cumulative 
infringements. 
Tax increase (in addition to the above penalties): 
Material scope: materially incomplete or incorrect 
reporting/submission of required information  
Personal scope: Relevant taxpayers (users of the 
reportable arrangements) 

Unspecified. Tax 
administration may 
reduce the amount of 
tax increase (i.e. fully 
or partially exempt 
from the 40% main 
rule) in case it would 
be unreasonable to 
impose it in full. 
SEK 15.000 (EUR 1.462) 
for advisers and SEK 
7.500 (EUR 731) for 
users  

40% of the amount of tax that 
would have been left non-
imposed in case assessment 
had been based on the 
inaccurate information. 

SEK 15.000 (EUR 1.462) for 
advisers and SEK 7.500 (EUR 
731) for users  

SEK 20.000 (EUR 1.950) 
advisers 
 SEK 10.000 (EUR 975) 
users 

SEK 20.000 (EUR 1.950) 
advisers 
 SEK 10.000 (EUR 975) users 

Turnover at least SEK 
15.000.000 (EUR 
1.462.415): 
 SEK 30.000 (EUR 
2.925) advisers 
 SEK 15.000 (EUR 
1.462) users 

Turnover at least SEK 
500.000.000 (EUR 
48.747.197): 
 SEK 150.000 (EUR 14.624) 
advisers 
 SEK 75.000 (EUR 7.312) users 

40% of the amount of tax that 
would have been left non-
imposed in case assessment 
had been based on the 
inaccurate information. 

Unspecified. Tax 
administration may 
reduce the amount of 
tax increase (i.e. fully 
or partially exempt 
from the 40% main 
rule) in case it would 
be unreasonable to 
impose it in full. 

SI 

DAC 2  

The scope rationae personae: reporting financial 
institutions (FI)   
The scope rationae materiae: 
 1)FI does not implement due diligence procedures 
and collect the info that is subject to the reporting 

From EUR 1600 

To EUR 25 000 

101 

 
 
 
 
 
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
 
 
 
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
From EUR 400 

To EUR 4000 

From EUR 1600 

To EUR 25.000 

From EUR 400 

To EUR 4000 

From EUR 3.200 

EUR 30. 000 

EUR 800 

To EUR 4.000 

From 10.500 

To EUR 150.000 

EUR 1400 

To EUR 20.000 

requirements, 2) does not keep documentation 
showing the procedures used to collect information,3) 
does not provide info to the competent authority with 
regard to reportable accounts or does not provide 
info in a timely manner or 4) fails to state relevant 
currencies in its report or 5) does not provide info 
showing that it has not identified the reportable 
accounts in the respective calendar year. 

 

 

 

A penalty for a responsible person  
(individual) of the Reporting FI for the 
above stated offences: 

A penalty for a responsible management 
company or a manager of an investment or 
pension fund without a legal entity for the 
above stated offences: 

A penalty for a responsible person of the 
management company or manager of the 
investment or pension fund without a legal 
entity for the above offences: 

Legislation does not explicitly indicate if these 
penalties apply per single or cumulative infringement, 
but from the way it is drafted I would tend to think it 
can apply to an individual infringement, but also 
globally to all infringements within a certain time 
period (the act uses continues tense and plural verbal 
forms: e.g. the FI is not collecting information as 
required, is not reporting,..) The number of inf. will 
then, in my view, determine the level of penalty 
(between EUR 1060 and 25.000). This is purely my 
personal view. 

Personal scope: Reporting entities (as defined under 
DAC4 , I.e. legal entities  
Higher penalties for medium sized and big companies, 
which will  be the case for the entities at stake here: 

 

A penalty for a responsible person  
(individual) of the Reporting entity, which 
will be  considered  as ‘’middle sized or big 
company’’: 

If the nature of the infringement is particularly  
serious (on purpose wrong reporting, intention to 
secure financial advantage, or because of serious 
damage caused to the fisc- considered as more than 
EUR 25.000) for medium and big entities the penalty 
is:  

 

  A penalty for a responsible person  
(individual) of the Reporting entity, which 
will be  considered  as ‘’middle sized or big 
company’’ in case of the above mentioned 
particularly serious infringement: 

Material scope: failure to report, reporting not in line 
with the required formalities or not within the 
deadline. 
The provision speaks about penalty when an entity 
commits an infringement  by not reporting,, missing 
deadlines...difficult to say whether individual or 
cumulative, but I would tend more towards the 

102 

DAC 4  

 
 
 
 
 
  
  
 
 
  
  
  
  
  
  
  
  
  
  
 
  
  
  
  
  
  
  
  
  
  
  
  
DAC 6  

SK  

DAC 2 as 
implement
ed by 
Section 23 
of Law 
359/2015 

DAC 4 as 
implement
ed by Act 
No. 
442/2012 
Coll. 

DAC 6  

cumulative nature, of course considering a certain 
time frame (e.g. within a tax year). 
Article 394 of the Tax Procedure Act (TPA) for 
individuals and Article  397 TPA for entrepreneurs and 
companies 
The scope rationae personae: individuals; 
The scope rationae materiae: 1) no reporting (‘’fails to 
submit data on the cross-border arrangement to be 
reported’’), 2) late reporting (‘’fails to submit them 
within the prescribed time limit), 3) partial reporting 
(‘’fails to submit them for each year in which the 
arrangement applies). 
The scope rationae personae: entrepreneurs and legal 
persons ; the scope rationae materiae:1) no reporting 
(‘’fails to submit data on the cross-border 
arrangement to be reported’’), 2) late reporting (‘’fails 
to submit them within the prescribed time limit),  no 
regular reporting, 3) partial reporting (‘’fails to submit 
them for each year in which the arrangement applies), 
5) fails to inform the intermediary or a taxpayer about 
the use of the professional secrecy waiver.  
Legislation does not explicitly indicate if these 
penalties apply per individual or cumulative 
infringements. 

Material scope: failure of reviewing financial 
accounts, obtaining information on financial 
accounts, notification obligation and FACTA 
obligations 
Personal scope: financial institutions 
Individual/cumulative application: The law does 
not say whether the penalties are per individual 
infringement or for cumulative infringements, 
however it specifies that sanctions could be 
repeatedly applied. 
Material scope:  not reporting on CbCR basis or 
not providing notification 
Personal scope: a) the ultimate parent entity, 
the surrogate parent body or the constituent 
entity, if it fails to report on a CbC basis 
(pursuant to Sections 22b to 22d and 22 f);  
b) a constituent entity referred to in Section 22c 
(1) if it fails to notify (under Section 22c (2) and 
(3), i.e. inform the competent authority that the 
ultimate parent entity has refused to make the 
necessary information available); 
c) the constituent entity, if it does not submit a 
notification (notify the competent authority of 
the name, registered office, identification 
number of the reporting entity pursuant to 
Section 22e). 

Individual/cumulative application: The law does 
not say whether the penalties are per individual 
infringement  or  for  cumulative  infringements, 
however  it  specifies  that  sanctions  could  be 
repeatedly applied 

Material  scope: 
obligations, 

failure  to  meet  reporting 
that 
confirmation 

including 

103 

From EUR 250 

to EUR 400 

From EUR 800 

to EUR  10.000 

n.a. 

 10,000 EUR, also 
repeatedly. 

n.a 

a) a fine of up to 10,000 
EUR, including repeatedly; 
(b) and (c) a fine of up to 
EUR 3,000, even 
repeatedly. 

n.a 

30,000 EUR 

 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
another 
reporting  has  been  made  by 
intermediary or taxpayer or failure to meet the 
relevant deadlines. Fine can be applied for each 
Slovak MDR reporting obligation 
Personal scope: intermediaries and taxpayer 
Individual/cumulative application: The law does 
not say whether the penalties are per individual 
infringement or for cumulative infringements. 

DAC7 was adopted in March 2021 and shall be implemented by 1 January 2023. As a consequence, there 
is not yet any information available on the compliance measures applicable in Member States based on the 
obligations on DAC7. 

104 

 
 
 
 
 
 
 
 
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106