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Tax cooperation on crypto-assets: what does draft implementing law contain?

The Ministry of Finance has prepared an amendment to the Act on International Cooperation in Tax Administration, which implements the EU directive on the introduction of the automatic exchange of information reported by providers of services with crypto-assets (DAC 8). Crypto-asset service providers will be required to collect data on service users and their transactions and subsequently provide it to the financial administration for the exchange of information within the EU.

The definition of a reporting crypto-asset service provider follows the EU Regulation on Markets in Crypto-Assets and anti-money laundering legislation. It primarily applies to providers of these services that are authorised to provide their services by the CNB. According to the explanatory report, there are dozens of such providers operating in the Czech Republic.

For the purposes of DAC 8, a crypto-asset is defined by reference to the EU Markets in Crypto-Assets Regulation as "a digital representation of values or rights that can be transferred and stored electronically using distributed ledger technology or similar technology", excluding central bank digital currencies and electronic money. However, in addition to this definition, all other crypto-assets that can be used for payment and investment purposes and all virtual assets under anti-money laundering legislation are also considered to be crypto-assets for the purposes of DAC 8.
A reportable user is defined as a person or entity that uses the services of a reporting crypto-asset service provider and is a resident of an EU state or a third country that has concluded a relevant international treaty with the Czech Republic.

A reportable transaction includes any crypto-asset exchange transactions and transfers. An exchange transaction means the exchange of crypto-assets for official currency or for other crypto-assets regardless of the transaction value. A transfer of crypto-assets involves the transfer of crypto-assets to another user's account or outside the operator's sphere of disposition, including transfers to non-hosted addresses or within reported retail transactions where the value of the goods transferred exceeds USD 50,000.

The reporting provider is required to register and submit an annual report that will include the identification data of the crypto-asset service providers (address, Corp. ID number, Tax ID number, etc.), the details of the reportable users, the name of the crypto-assets, the number of transactions, and the total amount received and paid by the user during the reporting period. The reported information will be shared between financial administrations. The penalty for non-compliance with this reporting obligation may amount to up to CZK 1,500,000. This penalty should not be levied for non-compliance with other reporting obligations (e.g., DAC 6). The amendment is proposed to take effect on 1 January 2026.

The amendment also extends the scope of the automatic exchange of information to tax rulings with a cross-border element issued to individuals (DAC 3). It also proposes that the reporting of cross-border arrangements (DAC 6) should include a description of the relevant arrangements and any other information that could assist the relevant authority in assessing the potential tax risk.