Germany tightens taxation of digital assets… exchanges to automatically report user information to tax authorities

The German government is tightening tax rules on digital assets.

According to Cryptopolitan on the 14th (KST), Germany will strengthen its digital-asset taxation rules from this year by incorporating the European Union’s (EU) revised Directive on Administrative Cooperation (DAC8). The rules require crypto-asset service providers (CASPs) to report user information and transaction details to tax authorities.

Specifically, DAC8 stipulates the establishment of an automatic exchange framework for digital-asset transaction information among EU member states. Accordingly, digital-asset exchanges in Germany—as well as overseas firms providing services to German users—must share user information and transaction data with Germany’s federal and state tax authorities.

Major digital-asset exchanges including Bitpanda, Bison, Binance, Coinbase and Kraken are expected to be covered.

Some say the tougher tax rules could significantly raise the likelihood of detecting tax evasion by digital-asset investors. German media outlet Handelsblatt analyzed that “the risk of being caught for tax evasion related to digital assets is rising sharply.”