Directive on Administrative Cooperation

Definition ∞ The Directive on Administrative Cooperation, often referred to as DAC, is a European Union legislative act that mandates information exchange between member states’ tax authorities. It aims to enhance transparency and combat tax evasion across borders. The directive has expanded to include various income sources, notably digital assets.
Context ∞ The current state of DAC involves its latest iteration, DAC8, which extends reporting obligations to cover crypto-asset transactions and e-money. A key discussion centers on the practical implementation challenges for crypto service providers in collecting and reporting the necessary data accurately. Future developments will focus on harmonizing reporting standards and ensuring effective data exchange to prevent illicit financial activities within the digital asset space.