What is DAC8?
DAC8 is the eighth amendment to the EU Directive on Administrative Cooperation, which governs how EU tax authorities exchange information.
Adopted as Council Directive (EU) 2023/2226, DAC8 introduces tax-transparency requirements for certain crypto-asset transactions. It requires in-scope crypto-asset service providers to collect tax-residence information from customers and report specified customer and transaction data to the relevant tax authority.
In Latvia, DAC8 has been implemented through amendments to the Law on Taxes and Fees and Cabinet Regulation No. 751 of 9 December 2025 on the automatic exchange of information concerning crypto-asset transactions.
Why does DAC8 exist?
Crypto-assets can be transferred and traded across borders without involving traditional financial institutions. This can make it difficult for tax authorities to obtain the information needed to assess whether taxpayers are meeting their obligations.
DAC8 establishes a common reporting framework intended to improve tax transparency and enable the automatic exchange of relevant information between tax authorities.
When does DAC8 apply?
DAC8 applies from 1 January 2026. The first reporting period covers transactions carried out between 1 January and 31 December 2026.
SIA Paybis Europe must submit its first report to the Latvian State Revenue Service (VID) by 30 June 2027. VID will then exchange the relevant information with other competent tax authorities by 30 September 2027.
Who does DAC8 apply to?
DAC8 applies to Reporting Crypto-Asset Service Providers, including authorised providers under the EU Markets in Crypto-Assets Regulation (MiCA) and certain other operators that carry out reportable crypto-asset transactions for or on behalf of customers.
Certain non-EU providers serving EU-resident customers may also fall within scope, subject to the applicable nexus, registration and equivalent-reporting rules.
Crypto-assets in scope include those that can be used for payment or investment purposes, and may include certain stablecoins and NFTs depending on their characteristics and legal classification.
Excluded from scope:
- Electronic money
- Central bank digital currencies
- Crypto-assets that cannot be used for payment or investment purposes
Separate tax-transparency rules may apply to certain electronic-money products.
What information is reported?
Customer information
For reportable customers, the following may be reported:
- Full name and address
- Jurisdiction(s) of tax residence
- Tax Identification Number (TIN) or functional equivalent
- Date of birth and, if known, place of birth (individuals)
- For entity customers: information about reportable controlling persons
Transaction information
Depending on the transaction type, the following may be reported:
- Type and name of the crypto-asset
- Aggregate gross amounts paid or received
- Aggregate fair market value
- Number of crypto-asset units
- Number of transactions
- Information about relevant transfers, including certain transfers to external distributed-ledger addresses
Note: Tax residence — not nationality — determines which tax authority receives the information. Passively holding crypto-assets is not a reportable transaction. However, acquisitions, disposals, exchanges or transfers carried out during the reporting period may be reportable.
How does DAC8 relate to global reporting standards?
DAC8 is based on the OECD Crypto-Asset Reporting Framework (CARF). It governs reporting and information exchange within the EU. Similar information may also be exchanged with participating non-EU jurisdictions where CARF exchange arrangements have been activated.
SIA Paybis Europe's obligations under DAC8
SIA Paybis Europe is authorised by Latvijas Banka as a crypto-asset service provider under MiCA and is subject to DAC8 requirements in respect of its in-scope services and reportable transactions.
To comply with DAC8, we are required to:
- Obtain valid tax-residence self-certifications from customers within scope
- Determine whether customers and, where relevant, their controlling persons are reportable
- Assess whether the information provided is reasonable and consistent with information already held, including KYC records
- Obtain an updated self-certification or supporting explanation where information changes or appears incorrect
- Report the required customer and transaction information to VID annually
- Maintain records demonstrating compliance with due diligence and reporting requirements
- Restrict reportable transactions where legally required information is not provided following the prescribed request and reminder process
VID is responsible for exchanging the relevant information with the competent tax authorities of the customer's jurisdiction(s) of tax residence.
Paybis does not provide tax advice and cannot advise customers on their personal tax-residence status, tax filings or other tax obligations.
What will we ask you for?
We will ask you to confirm your jurisdiction(s) of tax residence and provide your Tax Identification Number (TIN) or functional equivalent.
For entity customers, we may also request information about the entity's tax classification and, where required, its controlling persons.
The information must be provided through a valid self-certification. We are required to assess whether it is reasonable in light of the information available to us. If information is incomplete, inconsistent or affected by a change in circumstances, we may request an updated self-certification, an explanation or supporting documentation.
Pre-existing customers: If you are identified as a pre-existing customer under DAC8 rules, we may contact you to complete the required due diligence. The review of pre-existing customers for the first reporting period must be completed by 31 December 2026.
Please keep your tax-residence information up to date. If your circumstances change, update your account details or contact our support team.
If you are unsure of your tax residence — for example because you live, work or are registered in more than one country — you should consult a qualified tax adviser.
What happens if the required information is not provided?
If you do not provide the required information, we will send two reminders.
If the information remains outstanding after those reminders — and no earlier than 60 days after our initial request — we are required to prevent you from carrying out reportable transactions until the required information has been provided.
Any restriction will be limited to the extent required by applicable law.
How is your data handled?
We collect and process the personal data required for DAC8 compliance because we are legally required to do so. The legal basis is Article 6(1)(c) of the GDPR: processing necessary for compliance with a legal obligation.
Recipients of reported information may include:
- The Latvian State Revenue Service (VID)
- The competent tax authority of your jurisdiction(s) of tax residence
- Where applicable, competent authorities in participating non-EU jurisdictions under activated CARF exchange arrangements
Retention: Records maintained for DAC8 compliance are generally retained for five years. This may be extended — but not beyond ten years after the end of the relevant reporting period — where required by a competent authority on justified grounds.
You have the right to access your personal data and have inaccurate information corrected. In certain circumstances, you may also have the right to request restriction of processing or exercise other rights under applicable data-protection legislation.
We cannot erase, amend or withhold information to the extent that its retention or reporting is required by law.
For further information about how we process personal data and your rights, please see our Privacy Policy.
What does this mean for you as a customer?
DAC8 requires Paybis to identify reportable customers and report specified information about reportable crypto-asset transactions.
Key points to be aware of:
- Passively holding crypto-assets is not a reportable transaction, but you may still be asked to provide a tax-residence self-certification as part of the customer due diligence process.
- DAC8 is a reporting framework only. It does not determine whether a transaction is taxable, create a new tax liability or change how crypto-assets are taxed in your jurisdiction.
- It does not replace your responsibility to understand and comply with your personal tax obligations.
This article is provided for general information only and does not constitute tax or legal advice. The tax treatment of crypto-assets varies between jurisdictions. You should consult a qualified tax adviser regarding your individual circumstances.