Cyprus implemented EU Directive 2023/2226 (DAC8) on administrative cooperation in taxation from January 1, 2026, introducing comprehensive reporting obligations for crypto-asset service providers and enhanced transparency measures for digital assets.
Reporting Framework
The legislation establishes due diligence requirements and reporting obligations for crypto-asset service providers operating in Cyprus. Service providers must collect and report information on crypto-asset users and transactions to enable automatic exchange of information with other EU member states under the DAC8 framework.
The first reporting deadline is June 30, 2027, covering calendar year 2026 data. This timeline aligns with the EU-wide implementation schedule for crypto-asset transparency measures.
Scope and Coverage
The rules apply to reporting crypto-asset service providers established in Cyprus, requiring them to identify and report on crypto-asset users who are tax residents in other EU member states. The legislation also covers reportable crypto-asset users who are Cyprus tax residents, ensuring comprehensive coverage of the jurisdiction's crypto ecosystem.
Article 7F and Annex IV of the implementing law specify the technical requirements for data collection, due diligence procedures, and information reporting standards that service providers must follow.
Context
Cyprus joins other EU member states in implementing DAC8 as part of the bloc's broader effort to bring crypto-assets under traditional tax transparency frameworks. The directive extends automatic exchange of information principles to digital assets, addressing regulatory gaps that emerged with the growth of cryptocurrency markets across Europe.
