Amendment to the Act on International Cooperation (DAC 8)
The EU Council adopted another directive last year that brings changes to international cooperation in tax administration (the “DAC 8”). The Ministry of Finance has prepared an amendment to the Act on International Cooperation, and an external comment procedure was finalised in late April 2024. The directive expands the reporting duty to crypto-asset service providers who will be obliged to collect data about users and executed transactions, which will subsequently be reported to financial administration by those service providers. The amendment is expected to come into force on 1 January 2026.
The reporting provider of the concerned services will primarily be a provider holding a Czech National Bank’s authorisation who provides or mediates exchanges or transfers of crypto-assets for their customers (please refer to details on reportable transactions below).
Under DAC 8, a crypto-asset’s definition will refer to the Regulation on Markets in Crypto-Assets, i.e. “’crypto-asset’ will mean a digital representation of value or rights which may be transferred and stored electronically, using distributed ledger technology or similar technology”, central bank digital currencies or electronic money being examples of an exception.
Reportable user will be a person/ entity that uses services of reporting providers and is an EU or a contracting state’s tax resident.
Reportable transaction will be any exchange transaction irrespective of its value, specifically an exchange of crypto-assets for another official currency or other crypto-assets. The USD 50,000 threshold will be the limit to report a crypto-asset transfer in case of retail transactions. Transfers of crypto-assets to another user’s account or outside an operator’s availability area will be limit-free.
The reporting provider will be obliged to register and to submit annual lists with required data. Reported information will be shared among financial administrations. Failure to meet the defined duties can be sanctioned by a fine of up to CZK 1,500,000.
If you want more information on this topic, please feel free to contact us. We will be happy to help.
Michaela Kozminská
kozminska@clarksonhyde.cz
