Gearing up for crypto-asset tax reporting requirements in 2026

In line with the formal adoption of EU Directive 2023/2226 amending Directive 2011/16/EU on administrative cooperation in the field of taxation (‘DAC8’) by the Council of the European Union on 16 May 2023, Member States (‘MSs’) are required to transpose DAC8 by 31 December 2025 and the relevant information is to be collected for subsequent reporting as from 1 January 2026. Although Malta has not yet transposed DAC8 into domestic law, such transposition is expected to take place in the coming weeks.

In scope intermediaries, customers and transactions

The entities and individuals subject to data collection and reporting requirements under DAC8 includes:

• Crypto-Asset Services Providers (‘CASPs’), which are defined as legal persons or other undertakings whose occupation or business is the provision of one or more Crypto-Asset Services to clients on a professional basis, and that are allowed to provide Crypto-Asset Services in accordance with the Markets in Crypto-Assets Regulation (‘MiCA’); and
• Crypto-asset operators (‘CAOs’), which are defined as providers of Crypto-Asset Services other than a Crypto-Asset Service Provider. A CAO is a natural person, legal person or undertaking that is providing Crypto-Asset Services to third parties on a professional basis, but falling outside of the scope of MiCA. A CAO can be a service provider which may be an EU natural person or a non-EU legal entity or natural person.

Any CASP and any CAO that conducts one or more Crypto-Asset Services effectuating Exchange Transactions for or on behalf of a Reportable User are considered to be a Reportable Crypto-Asset Services Provider (‘RCASP’).

Under DAC8, a Reportable User is a Crypto-Asset User that is a Reportable Person resident in a MS. In this regard, a Crypto-Asset User may be an individual or entity that is a customer of a RCASP for the purpose of carrying out Reportable Transactions, which is defined as any Exchange Transaction and Transfer of Reportable Crypto-Assets (‘RCAs’). An Exchange transaction means any exchange between RCAs and fiat currencies, and any exchange between one or more RCAs while Transfers refer to the movement of a RCAs into or out of a user’s wallet or account, except when both wallets are maintained by the same RCASP for the same Crypto-Asset User.

In scope assets and services

In terms of DAC8, a Crypto-Asset refers to a digital representation of a value or of a right that is able to be transferred and stored electronically using distributed ledger technology or similar technology. This includes payment tokens (e.g. Bitcoin, Ethereum, etc.), asset-referenced tokens (e.g. USDC, Tether, BUSD, etc.) and equity/debt tokens (i.e. equity shares or debt instruments).

DAC8 defines RCAs as Crypto-Assets other than a Central Bank Digital Currency, Electronic Money, or any Crypto-Asset for which the RCASP has adequately determined that it cannot be used for payment or investment purposes.

Crypto-Asset Services under DAC8 include the following services:

• providing custody and administration of crypto assets on behalf of clients;
• operation of a trading platform for crypto-assets;
• exchange of crypto-assets for funds;
• exchange of crypto-assets for other crypto-assets;
• execution of orders for crypto-assets on behalf of clients;
• placing of crypto-assets;
• reception and transmission of orders for crypto-assets on behalf of clients;
• providing advice on crypto-assets;
• providing portfolio management on crypto-assets;
• providing transfer services for crypto-assets on behalf of clients; and
• staking and lending.
  

Obligations of RCASPs

A RCASP is subject to the reporting and due diligence requirements in a MS if it is:

• an entity authorised by a MS or allowed to provide Crypto-Asset Services following a notification to a MS; or
• not an entity authorised by a MS or allowed to provide Crypto-Asset Services following a notification to a MS, and it is:

a) an entity or individual resident for tax purposes in a MS;

b) an entity that:

i. is incorporated or organised under the laws of a MS and
ii. either has legal personality in a MS or has an obligation to file tax returns or tax information returns to the tax authorities in a MS with respect to the income of the entity;

c) an entity managed from a MS; or

d) an entity or individual that has a regular place of business in a MS.

Information to be reported

A RCASP shall report its own name, address and Tax Identification Number (‘TIN’) and the global legal entity identifier.

With respect to its Crypto-Asset Users that are Reportable Users or that have Controlling Persons that are Reportable Persons, RCASPs shall report:

• the name, address, MS(s) of residence, TIN(s) and, 
  • in the case of an individual, date and place of birth of each Reportable User and,
  • in the case of any entity, the name, address, MS(s) of residence and TIN(s) of the entity and the name, address, MS(s) of residence, TIN(s) and date and place of birth of each Controlling Person of the entity that is a Reportable Person, as well as the role(s) by virtue of which each such Reportable Person is a Controlling Person of the Entity.
• Information for each RCA, including, inter alia, the full name of the type of RCA, the aggregate gross amount paid or received in the Reportable Transaction or the aggregate fair market value of the transaction together with the aggregate number of units and the number of Reportable Transactions executed in each described transaction.

Next steps for RCASPs

In view of the requirement for in-scope RCASPs to collect and eventually report information in relation to Reportable Transactions, it is essential that institutions offering crypto-asset services or electronic money services to customers in the EU assess whether they fall within the scope of DAC8 and adopt the necessary steps to implement appropriate data collection tools to ensure compliance with the applicable due-diligence and reporting requirements. A RCASP in Malta will be required to register with the Malta Tax and Customs Administration (the ‘MTCA’); however, the method and timeframe for completing this registration have not yet been prescribed. These procedural details are expected to be clarified in the MTCA’s forthcoming DAC8 guidelines once published.