Lesson 6 — The EU framework: DAC8, MiCA, and member-state variation
DAC8 standardises EU-wide reporting from 2026; MiCA defines the regulatory frame. But CGT rules remain national. Today: how the layers fit.
The EU has built two converging regulatory frameworks for crypto: MiCA defines who can offer crypto services in the EU; DAC8 defines how crypto transaction data is reported between tax authorities. Crucially, neither standardises *how* crypto is taxed — that remains national. This lesson covers the EU-level layers and the major member-state variations.
**DAC8 in force from 2026.** Council Directive 2023/2226, adopted October 2023, requires EU-based crypto-asset service providers and reporting platforms to collect customer due-diligence information and report transactional data to tax authorities, who then exchange the data EU-wide. Practical effect: from 1 January 2026, any crypto transaction through an EU-licensed service provider is visible to your national tax authority. The framework mirrors the OECD's CARF (Crypto-Asset Reporting Framework) and includes EU residents transacting on non-EU platforms via reverse-solicitation provisions.
**MiCA — the regulatory framework.** Markets in Crypto-Assets Regulation took full effect from 30 December 2024. MiCA defines which entities can issue crypto-assets (stablecoins via the EMT/ART regime), provide crypto services (CASP licensing), and operate trading platforms within the EU. MiCA is *not* primarily a tax framework, but it shapes the universe of available services and creates the reporting plumbing that DAC8 uses. EU residents using non-EU exchanges still owe their national taxes; MiCA simply defines who can serve them within the EU.
**Germany — 1-year holding rule.** Germany's tax framework is notable for the **1-year holding exemption**: cryptoassets held for more than one year before disposal are tax-free for individuals (private sale gains, §23 EStG). Held under a year, gains are taxed at the marginal personal income tax rate (up to ~45%). Staking rewards are income at receipt; the staking activity itself can extend the holding period for the underlying tokens (a contested area). Mining and frequent trading can rise to commercial activity, which loses the 1-year benefit. Germany is often considered one of the more crypto-favourable EU jurisdictions for long-term holders.
**France — flat tax regime.** France applies the **PFU (Prélèvement Forfaitaire Unique)** flat tax of 30% (12.8% income tax + 17.2% social contributions) to capital gains from cryptoassets for individual investors. Calculation uses an aggregate-portfolio method: each disposal is treated as a proportional sale of the entire crypto portfolio at average cost. The progressive-income-tax option is available for some lower-bracket individuals if more favourable. Professional trading reclassifies the activity to a different tax regime (BIC).
**Netherlands — Box 3 wealth tax.** The Netherlands treats cryptoassets primarily under Box 3 (income from savings and investments), which uses a notional return on the total value rather than actual realised gains. Practical effect: you're taxed on a presumed return regardless of whether you've sold. This makes cost-basis tracking less critical for ordinary holders (no realisation events for CGT purposes) but creates effective tax even on unrealised gains. Professional trading falls under Box 1 with ordinary tax. The Dutch system has been challenged in court and is undergoing reform.
**Spain — wealth + capital-gains.** Spain taxes crypto gains as savings income at 19–28% depending on the amount, plus a separate annual wealth tax in certain autonomous regions. Spain has been particularly aggressive on enforcement, including using crypto-exchange data via DAC8 precursors and via direct requests to Spanish-based exchanges. Spanish residents using foreign exchanges must report holdings via Modelo 720 (foreign-assets declaration) and Modelo 721 (crypto-specific declaration, effective from 2024).
**Portugal — historically lenient, now structured.** Portugal historically did not tax crypto gains for individual investors (under a 2016 ruling that crypto was a payment method, not a taxable asset). The 2023 budget changed this: crypto gains held under 1 year are taxed at 28%; held over 1 year are tax-free (similar in structure to Germany). Crypto income (staking, mining) is taxed under the personal income tax regime. Portugal remains relatively favourable for long-term holders.
**Italy — proportional flat tax.** Italy applies a 26% flat tax on crypto capital gains above an annual threshold (initially €2,000, with proposed increases). The treatment was clarified in the 2023 budget law. Italian tax software generally handles this correctly; cross-border issues can arise for Italian residents transacting on non-EU platforms.
**The composite EU picture.** From a user perspective: DAC8 means your tax authority knows about your transactions; MiCA means the providers you use are regulated; your specific national rules determine your liability. The combination eliminates the 'they'll never find out' assumption that some users operated under in earlier years. Compliance posture in 2026 onward is essentially: report accurately because they have the data.
Example
Same transaction, two EU jurisdictions. User holds 5 ETH bought at €2,000 average; in 2026 disposes of all 5 at €4,000 each (€20,000 total proceeds, €10,000 of gain). **Germany — held 18 months**: tax-free (1-year exemption applies). **Germany — held 6 months**: €10,000 gain taxed at marginal income rate (potentially €4,500+). **France — held any duration**: 30% PFU flat = €3,000. **Portugal — held 6 months**: 28% = €2,800. **Portugal — held 18 months**: tax-free. **Netherlands**: not a realisation event for Box 3 purposes; the entire portfolio is taxed on notional return regardless of the sale. **Italy**: 26% flat above €2,000 threshold = approximately €2,080. Same economic transaction, six different tax outcomes ranging from €0 to €4,500+. EU residents transacting cross-border are wise to consult professionals in their specific jurisdiction.
Common mistakes
- Assuming MiCA harmonises taxation. It doesn't — taxation remains fully national.
- Believing DAC8 doesn't apply to non-EU exchanges. EU residents must self-report; DAC8 expanded reporting captures the data they previously thought private.
- Applying German 1-year exemption to crypto activity that has tipped into commercial trading. Frequent activity loses the exemption.
- Treating French aggregate-portfolio calculations as optional. PFU is the default; only specific situations allow the progressive-income-tax alternative.
- Forgetting Spanish Modelo 721. Spanish residents using foreign crypto platforms must declare; non-declaration triggers significant penalties.
- Conflating Portugal's pre-2023 framework with current rules. The 28% under-1-year regime is now in effect.
Safety warning
Tax rules vary materially across EU member states. This lesson is jurisdiction-general except where specifically noted. Consult a tax professional in your specific EU country for decisions.
Check your understanding
You are a German tax resident in 2026. You bought 10 ETH for €20,000 (€2,000/ETH) in March 2024. You sell all 10 ETH in September 2025 (18 months later) for €40,000 (€4,000/ETH). Under Germany's §23 EStG framework, what is your tax position on the gain?
Key terms covered
Sources & further reading
- Primary
- Primary
- Primary
- Primary
- Primary
We prioritise primary sources. Where a topic moves quickly (regulation, security incidents), we re-check sources on the cadence shown by the page's "Next review" date.