The European Battle for Data in Tax Administration: Balancing Innovation and Compliance

Abstract

The development of Blockchain technology in recent years has underscored the need for legislative harmonisation through the creation of specific regulations at the level of the European Union. This technology has opened new doors to tax fraud and tax evasion activities in the tax field. As a response, the battle for data took the form of Council Directive (EU) 2023/2226 amending Directive 2011/16/EU on administrative cooperation in the field of taxation. The cost of ensuring transparency in this area falls on Crypto-Assets service providers, who are now required to collect and report more data to Member States. Through the fiscal cooperation mechanism, the tax authorities access to users' data is extensive, legitimised only by the interest to assure proper taxation and the security of the European Union`s internal market. In this context, this study aims to outline an overview of the data collected for tax purposes within the Blockchain sector and the obligations of the involved parties.

Keywords

• data
• blockchain
• crypto
• tax administration
• dac8
• crypto-asset service provider
• crypto-asset operator
• reporting obligations
• administrative cooperation.