With the introduction of the DAC8 Directive, the EU is establishing a new standard for tax transparency in crypto asset transactions from 2026 onwards. The aim is to effectively curb tax avoidance and facilitate the tracking of crypto gains. National legislators are implementing these requirements by means of the DAC8 Implementation Act. The new Crypto Asset Tax Transparency Act (Kryptowerte-Steuertransparenzgesetz, KStTG), which will come into force in Germany at the beginning of 2026, contains regulations on due diligence and reporting obligations for providers of crypto services and the automatic exchange of reported information (government draft, as of July 23, 2025). Taxpayers who have not yet declared their crypto income are therefore at risk of prosecution.
Reporting obligation also applies to foreign crypto service providers
In future, crypto exchanges and service providers – even those based outside the EU, provided they serve EU customers – will be obliged to report detailed information on their users’ activities to the national tax authorities. The data subject to reporting requirements from 2026 onwards includes, for example,
- personal data such as name, address, and date of birth,
- tax identification numbers of the customers concerned,
- specific details of the amount and market value of each transaction,
- purchase and sale data, and the current asset status of the digital assets held,
- account information including wallet addresses.
These reports are automatically exchanged between EU tax authorities to ensure complete control and tax transparency across borders. The reporting requirements primarily target users who are tax residents in the EU or in qualified third countries and who carry out crypto transactions. In Germany, the information is bundled at the Federal Central Tax Office.
With DAC8, the crypto market will finally be brought out of its anonymous niche from 2026 onwards: crypto transactions will no longer be considered a legal vacuum for tax purposes. Investors and service providers will have to prepare for significantly stricter and uniform compliance requirements across Europe in the future.
Requests for information and criminal tax proceedings may follow
The reporting requirement only applies to transactions from 2026 onwards and is not retroactive.
However, conclusions about past crypto transactions may be drawn from the information reported. In other words, if an investor engages in crypto activities in 2026 or maintains an account with an exchange in 2026, it is at least conceivable that they had already invested in cryptocurrencies before that. It is clear that this will lead to further requests for information from the tax authorities to investors in order to motivate them to file voluntary disclosures, or even to initiate criminal tax proceedings directly. Law enforcement agencies are taking increasingly aggressive action against crypto investors – their initial restraint is long gone.
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Various federal states in Germany are already evaluating crypto data using special software and artificial intelligence. Some federal states rely on software solutions known on the market, while others have programmed and are using their own tools.
Voluntary disclosure as the (only sensible) solution
Anyone who knows that they have not disclosed their crypto investments in the past, either in full or in part, and who maintains accounts on centralized exchanges must therefore take action. Criminal prosecution can only be avoided in Germany by submitting a voluntary disclosure that exempts them from punishment. Experience shows that processing crypto data and preparing a voluntary disclosure takes some time, usually several months, so immediate action is generally required. There will still be time in the first few months of 2026. This is because a voluntary disclosure is only “blocked” once tax evasion has been discovered – as long as no data has been received and evaluated by the German tax authorities, this will not be the case. However, if you want to be on the safe side, you should “come clean” in 2025 and not leave your immunity from prosecution dependent on how quickly or slowly the tax investigation works.
Our experienced tax experts will be happy to advise you on all aspects of crypto transactions in Germany.
