DAC8 and CARF: The New Crypto Tax Reporting Rules Explained

DAC8 and CARF: The New Crypto Tax Reporting Rules Explained

DAC8 and the Crypto-Asset Reporting Framework (CARF) require crypto-asset service providers to collect detailed user and transaction data and report it to tax authorities, which then exchange it automatically across borders. Both regimes apply from 1 January 2026, with the first reports and exchanges of information taking place in 2027. For accountants and tax advisers in the UK and Ireland, this is the moment crypto moves from a self-assessment honesty system to a data-matching regime comparable to the Common Reporting Standard for bank accounts.

What are CARF and DAC8?

The Crypto-Asset Reporting Framework is the OECD's global standard for the automatic exchange of tax information on crypto-asset transactions, published in 2022 as a deliberate response to the gap left by the Common Reporting Standard (CRS), which was designed around traditional financial accounts. Under CARF, reporting crypto-asset service providers (RCASPs) – exchanges, brokers, dealers and certain other intermediaries that effect transactions for customers – must perform due diligence on their users and report transaction data to their local tax authority, which then shares it with the user's jurisdiction of tax residence.

DAC8 is the EU's implementation of CARF. The eighth amendment to the Directive on Administrative Cooperation (Directive (EU) 2023/2226) had to be transposed by Member States by 31 December 2025 and applies from 1 January 2026. It folds the CARF rules into EU law, extends the EU's automatic exchange of information machinery to crypto-assets, and also updates CRS-style rules for e-money and central bank digital currencies. Because DAC8 captures any crypto-asset service provider with EU-resident users – wherever the provider is established – its reach is global, not merely European.

The UK has implemented CARF in parallel. Regulations made in June 2025 bring the framework into force from 1 January 2026, with UK reporting service providers required to file their first reports with HMRC by 31 May 2027 covering the 2026 calendar year. The UK has also extended the framework to require reporting on UK-resident users to HMRC, so domestic crypto activity is captured, not just cross-border holdings. Ireland, as an EU Member State, applies DAC8 through its transposing legislation on the same 1 January 2026 timeline.

Who has to report under DAC8 and CARF?

The reporting obligation sits with the service provider, not the investor. In-scope providers include:

• crypto exchanges (centralised trading platforms);
• brokers and dealers in crypto-assets;
• certain custodial wallet providers and other intermediaries that effect transactions on behalf of users; and
• operators of crypto ATMs and similar services.

Within the EU, there is a deliberate link to the MiCA regime: CASPs authorised under the Markets in Crypto-Assets Regulation are within DAC8's scope, and the directive is designed so that non-EU providers serving EU clients must register in a Member State for reporting purposes. Our overview of MiCA for finance professionals explains how the authorisation framework fits together.

What information will tax authorities receive?

Providers must collect and report, for each reportable user:

• identity data: name, address, date of birth, jurisdiction(s) of tax residence and tax identification number (in the UK typically the National Insurance number or UTR; in Ireland the PPSN);
• aggregate transaction data by crypto-asset type: acquisitions and disposals against fiat currency, exchanges of one crypto-asset for another, and transfers of crypto-assets (including, in some cases, payments made with crypto for goods and services above set thresholds); and
• the number of units and aggregate fair market value of those transactions.

Notably, crypto-to-crypto exchanges are reportable. Many retail investors still believe that swapping one token for another is invisible to tax authorities; from the 2026 reporting year, those swaps will be reported by the platform and exchanged between jurisdictions. Both HMRC and Irish Revenue have always treated crypto-to-crypto swaps as disposals for capital gains purposes, so the data will map directly onto existing tax liabilities – including historic ones, where patterns of past non-compliance become visible.

What are the key dates?

• 1 January 2026: DAC8 applies across the EU; the UK CARF regulations come into force. Providers must collect due diligence data on users and record reportable transactions from this date.
• During 2026: providers gather self-certifications of tax residence from new and existing users. Expect clients to receive requests from exchanges for TINs and residence confirmations – refusal can lead to account restrictions and, in the UK, user-level penalties.
• 31 May 2027 (UK): first reports due to HMRC for the 2026 calendar year.
• 2027 (EU): first DAC8 reports are filed and the first automatic exchanges between Member State tax authorities take place in respect of 2026 data.

What does this mean for accountants and tax advisers?

Expect data-led compliance activity

Once 2026 data is exchanged in 2027, HMRC and Revenue will be able to match reported transactions against self-assessment returns. Practitioners should anticipate nudge letters, enquiries and, for larger discrepancies, formal investigations. The prudent advice now is to get clients' affairs in order for earlier years – via voluntary disclosure where needed – before the data arrives. Our crypto tax guide for UK and Irish accountants covers the substantive CGT and income tax treatment in both jurisdictions.

Advise platform clients on registration and systems

Clients operating exchanges, brokerages or wallet services need a reporting build comparable to CRS onboarding: user self-certification workflows, residence and TIN validation, transaction aggregation by asset type, and XML reporting to the relevant authority. Penalties apply for late, inaccurate or incomplete reporting – in the UK these can include per-user penalties of up to £300 for unverified or inaccurate reports.

Mind the interaction with other regimes

DAC8 sits on top of MiCA authorisation, the Travel Rule under the Transfer of Funds Regulation, and AML obligations. The same client data is often needed for all four, and well-advised firms are building a single customer data model rather than four parallel compliance silos.

Frequently asked questions

Does CARF apply to decentralised exchanges and self-custody?

Pure self-custody (holding your own keys, with no intermediary) is generally outside the reporting net, because there is no service provider to report. Genuinely decentralised protocols raise harder questions, and the OECD's commentary focuses on whether any person exercises sufficient control over the platform to be a reporting provider. Advisers should treat claims that a platform is 'fully decentralised' with professional scepticism.

Do individual investors have to do anything?

Investors do not file CARF reports themselves, but they must provide valid self-certifications to their platforms and should expect their transaction history to be visible to their home tax authority. The practical message for clients is simple: assume full transparency from 2026 onwards.

How does this differ from the Common Reporting Standard?

The architecture is deliberately similar – due diligence, self-certification, annual reporting, automatic exchange – so firms and advisers familiar with CRS will recognise the machinery. The differences are in the detail: CARF reports transactions rather than year-end balances, captures crypto-to-crypto exchanges and transfers as well as fiat conversions, and applies to a new population of reporting entities, many of which have never run a tax reporting function before. DAC8 also amends the CRS itself to bring e-money products and central bank digital currencies within the existing account-reporting regime, so banks and e-money institutions have their own implementation work to do alongside the crypto sector.

Study with Learnsignal

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