On 27 March, Cyprus enacted legislative changes to its Law on Administrative Cooperation in Tax Matters, implementing the requirements of EU Directive 2023/2226. This directive updates the existing framework under Directive 2011/16/EU and marks the introduction of DAC8 into Cypriot law.
The new provisions significantly broaden the scope of automatic exchange of information between EU tax authorities by incorporating transactions involving crypto‑assets. Their primary objective is to enhance tax transparency and improve cross‑border cooperation by ensuring that crypto‑asset activities are subject to reporting standards comparable to those already applicable to traditional financial instruments.
DAC8 establishes a harmonised EU approach aligned with the OECD Crypto‑Asset Reporting Framework (CARF), ensuring consistency with emerging international reporting norms. Under this framework, information on crypto‑asset transactions will be automatically shared between EU Member States.
Reporting Obligations and In‑Scope Entities
The reporting obligations introduced by the amendment primarily apply to Crypto‑Asset Service Providers (CASPs). These entities are required to carry out due‑diligence procedures and submit detailed reports to the Cypriot tax authorities regarding their users and related crypto‑asset transactions.
Information to Be Reported
CASPs must collect and disclose comprehensive information, including:
- Identification details of reportable users
- Individuals: full name, residential address, date and place of birth, tax identification number (TIN), and tax residence.
- Legal entities: key entity information together with details of any controlling persons or beneficial owners.
- Transaction‑level data
For each category of reportable crypto‑asset, CASPs must report aggregated financial information covering:
- Purchases and disposals, including total amounts paid or received and the number of units involved.
- Market valuation data, reflecting transactions executed either against other crypto‑assets or in the context of retail payments.
- Transfers, capturing movements of crypto‑assets where these do not fall within conventional buying or selling activity.
- Transfers to external wallets
The legislation introduces a specific reporting requirement for crypto‑asset transfers to distributed ledger addresses that are not linked to regulated financial institutions or other virtual asset service providers. This measure aims to mitigate opacity risks associated with unhosted or self‑custodied wallets.