How to Submit Your First DAC8 Report

Submitting your first DAC8 report can feel overwhelming, but the process follows a logical sequence that most crypto-asset service providers (CASPs) can navigate with careful preparation. This guide walks you through each phase, from initial registration to final submission, so you understand what to expect and how to prepare.

> Disclaimer: DAC8 implementation varies by EU Member State. The steps below reflect the general framework established by Council Directive (EU) 2023/2226. Always check with your national tax authority for specific requirements, deadlines, and submission channels applicable in your jurisdiction.

Step 1: Determine Whether You Are a Reporting Crypto-Asset Service Provider

Before beginning the reporting process, you should confirm that your platform falls within the scope of DAC8. Generally, entities that provide exchange services between crypto-assets and fiat currencies, or between different crypto-assets, on behalf of customers may be considered Reporting Crypto-Asset Service Providers (RCASPs).

• Review the directive's definition of "Crypto-Asset Service Provider" and "Reporting Crypto-Asset Service Provider"
• Consider whether any exemptions may apply to your operations
• If you operate across multiple Member States, identify which jurisdiction is your primary reporting jurisdiction
• Consult legal counsel if your classification is uncertain

Step 2: Register with Your National Tax Authority

Most Member States are expected to require RCASPs to register before they can submit reports. The registration process typically involves:

1. Identify the competent authority in your Member State (usually the national tax administration)
2. Gather registration information, which may include your legal entity name, registration number, LEI (if applicable), registered address, and contact details
3. Submit your registration through the designated channel, which may be an online portal, a secure API endpoint, or in some cases a paper-based process
4. Receive confirmation of your registration status and any reporting identifiers assigned to you

Registration timelines vary. Some Member States may require registration well in advance of the first reporting deadline. It is advisable to begin the registration process as early as possible, ideally 6 to 12 months before your first report is due.

Step 3: Collect and Verify User Data

DAC8 reporting requires specific information about your users, often referred to as "Reportable Users." You should ensure your systems collect:

• Full legal name of the user
• Address (including country of residence)
• Tax Identification Number (TIN) for each jurisdiction of tax residence
• Date of birth (for individuals)
• Place of birth (for individuals, in some cases)
• Tax residency jurisdiction(s) based on self-certification

Key considerations:

• Self-certification forms should be integrated into your onboarding flow
• Existing users may need to be contacted to provide missing information
• TINs should be validated against known formats where possible
• Data should be stored securely in compliance with GDPR and applicable data protection rules

Step 4: Gather Transaction Data

You will need to compile transaction-level data for each Reportable User. This typically includes:

• Crypto-to-fiat exchanges with gross amounts, fees, and transaction counts
• Crypto-to-crypto exchanges with fair market value at the time of each transaction
• Transfer transactions that may need to be distinguished from exchange transactions
• Aggregated totals per crypto-asset type, per user, per reporting period

Ensure your systems can:

1. Categorize transactions according to DAC8 transaction types
2. Calculate fair market values reliably using consistent pricing sources
3. Aggregate data by user and by crypto-asset type
4. Distinguish between reportable and non-reportable transactions

Step 5: Prepare the XML Report

DAC8 reports are expected to follow an XML schema defined by the EU or adapted by your national tax authority. The preparation process generally involves:

1. Obtain the official XML schema (XSD) from your tax authority or the European Commission
2. Map your internal data fields to the required XML elements
3. Generate the XML file using your reporting software, an in-house tool, or a third-party compliance solution
4. Ensure correct character encoding (typically UTF-8)
5. Include all required header information, such as reporting period, message type, and sender identification

Common XML elements to prepare:

• MessageSpec - Message header with sender and receiver details
• CryptoAssetReportingBody - Your entity's reporting details
• ReportableUser - One block per reportable individual or entity
• TransactionRecord - Aggregated or individual transaction data

Step 6: Validate Your Report

Before submission, thorough validation is essential. Errors in submitted reports may result in rejection, delays, or follow-up queries from the tax authority.

• Schema validation: Run your XML against the official XSD to check structural compliance
• Business rule validation: Check that all required fields are populated, TIN formats are correct, amounts are consistent, and date ranges are valid
• Cross-checks: Verify that totals in the report match your internal records
• Test submissions: Some tax authorities may offer a testing or sandbox environment; take advantage of this if available

Validation checklist:

• [ ] XML is well-formed and parses without errors
• [ ] XML validates against the official XSD schema
• [ ] All mandatory elements are present and non-empty
• [ ] TIN formats match expected patterns for each country
• [ ] Financial amounts are in the correct currency and format
• [ ] Reporting period dates are correct
• [ ] Message reference IDs are unique
• [ ] No duplicate user records exist within the same report

Step 7: Submit the Report

Submission channels vary by Member State. Common methods may include:

• Secure online portals provided by the national tax authority
• Secure file transfer (SFTP) for larger files or automated submissions
• API-based submission where the tax authority provides an endpoint
• Manual upload through a government web interface

Submission tips:

1. Submit well before the deadline to allow time for error correction
2. Keep a copy of the submitted file and any confirmation receipts
3. Note the acknowledgement reference number provided by the tax authority
4. Monitor for any rejection notifications or requests for correction

Step 8: Handle Post-Submission Activities

After submission, your responsibilities continue:

• Monitor for acknowledgements confirming the tax authority received and accepted your report
• Respond to queries from the tax authority promptly
• File corrections if errors are discovered, using the appropriate correction message type
• Retain records for the period required by your national legislation (often 5 to 10 years)
• Document your process for audit purposes

Practical First-Submission Checklist

• [ ] Confirmed RCASP status and reporting obligations
• [ ] Registered with the competent national tax authority
• [ ] Self-certification forms deployed in onboarding flow
• [ ] Existing user data remediation completed or in progress
• [ ] Transaction data extraction and categorization tested
• [ ] XML generation and validation pipeline established
• [ ] Test submission completed (if sandbox available)
• [ ] Internal review and sign-off obtained
• [ ] Report submitted before the deadline
• [ ] Acknowledgement received and filed

Final Notes

Your first DAC8 submission is unlikely to be perfect, and tax authorities generally understand that the early reporting periods involve a learning curve. The most important steps are to engage early, build robust data collection processes, and validate thoroughly before submission.

For jurisdiction-specific guidance, consult your national tax authority's published guidance, or seek advice from a qualified tax professional experienced in crypto-asset regulatory compliance.

This article is for informational purposes only and does not constitute legal or tax advice. Requirements may change as Member States finalize their national transposition of DAC8.