From 1 January 2026, every cryptocurrency exchange serving EU users began automatically collecting your transaction data for reporting to Revenue. This is not speculation - it is EU law, now in effect. Exchanges are collecting data right now. Here is what is happening, who is affected, and what you need to do before Revenue receives your 2026 data in early 2027.
What is DAC8/CARF?
In October 2023, the EU adopted the Eighth Directive on Administrative Cooperation (DAC8), which implements the OECD Crypto-Asset Reporting Framework (CARF) across all EU member states. Think of it as the cryptocurrency equivalent of the Common Reporting Standard (CRS) that already applies to offshore bank accounts.
The timeline:
· 31 December 2025: Ireland and all EU member states transposed DAC8 into domestic law
· 1 January 2026: Crypto exchanges began collecting (NOW IN PROGRESS) reportable data
· 31 January 2027: First reports submitted to Revenue (covering all 2026 transactions)
· Q1 2027 onwards: Revenue begins cross-checking reported data against filed tax returns
As of January 2026, 63 jurisdictions globally have committed to implementing CARF, including Ireland, all EU member states, the UK, Switzerland, and Singapore. The United States is expected to join in 2027.
Who Must Report?
DAC8 targets Reporting Crypto-Asset Service Providers (RCASPs), which includes:
· Cryptocurrency exchanges (Coinbase, Kraken, Binance, etc.)
· Custodial wallet providers
· Brokers facilitating crypto trades
· Payment processors handling crypto transactions over 50,000 euro
· Potentially some DeFi platforms with identifiable operators
Critical detail: DAC8 has extraterritorial reach. Even exchanges based outside the EU must report on EU residents. If you are Irish and use a platform licensed anywhere in the participating jurisdictions, your data gets reported.
If you hold crypto in pure self-custody (hardware wallet, private keys only) with no interaction with regulated exchanges, you are not directly affected by automatic reporting. But the moment you touch a regulated platform - to buy, sell, or transfer - that activity enters the reporting system.
What Information Gets Reported to Revenue?
Exchanges will report comprehensive data for all 2026 transactions:
Personal Information:
· Full name and address
· Date of birth
· Tax Identification Number (PPS number)
· Country of tax residence
Transaction Data:
· Cryptocurrency purchases and sales (with euro values)
· Crypto-to-crypto exchanges (e.g., Bitcoin to Ethereum)
· Transfers to and from non-custodial wallets
· Account balances at year-end
· Gross proceeds from disposals
· Payment transactions exceeding 50,000 euro
What is NOT automatically reported:
· Transactions before 1 January 2026 (though Revenue can request historical data separately)
· Holdings in pure self-custody wallets
· Direct peer-to-peer transfers with no exchange involvement
· DeFi transactions that do not touch KYC platforms
The Account Freeze Provision
DAC8 includes an enforcement mechanism that does not exist under CARF: if you fail to provide a valid self-certification form to your exchange after two reminders within 60 days, the exchange must block your account from performing further reportable transactions.
This is not discretionary. It is a mandatory requirement under the directive. Exchanges serving EU users must collect valid tax residency information or freeze accounts. You should already be receiving (or will soon receive) email requests for self-certification. If you have not provided this information, expect reminders throughout 2026 with potential account freezes after 60 days.
For Individuals: What This Means
The Visibility Shift
Since Bitcoin inception, Irish crypto holders have operated in a grey zone. Revenue guidance states that cryptocurrency gains are taxable, but detection has been minimal. Most compliance has been voluntary.
DAC8 changes the equation. From 2027 forward, Revenue will have:
· Your identity linked to crypto activity
· Volume and frequency of transactions
· Ability to cross-reference against your filed tax returns
· Evidence of undeclared income if discrepancies exist
The Cost Basis Problem
When Revenue receives your 2026 data, it will not show your acquisition costs. It shows disposals and proceeds.
Example: Revenue sees you sold 50,000 euro of Bitcoin in 2026. Without documentation proving you bought that Bitcoin for 45,000 euro in 2022, Revenue might assume your entire proceeds are taxable. The burden of proof sits with you.
If you have been trading for years without maintaining records, reconstructing cost basis is urgent - exchanges are collecting data now. We are now in the reporting period, you are now building documentation while exchanges actively collect your 2026 data.
Pre-2026 Transaction Reconstruction
DAC8 only requires reporting from 1 January 2026 forward. But Revenue will not examine your 2026 activity in isolation.
If your 2026 data shows 100,000 euro in cryptocurrency sales, Revenue will naturally ask: where did this crypto come from? What was the acquisition cost? Why does your 2025 tax return not reflect these holdings?
To answer those questions, you need comprehensive records back to your first cryptocurrency purchase - potentially 2017, 2018, or earlier.
Action items for individuals:
1. Export complete transaction histories from every exchange you have ever used (Coinbase, Kraken, Binance, Revolut, etc.)
2. Document all wallet transfers: If you moved crypto from Exchange A to Exchange B, or to cold storage, map those transfers to avoid double-counting
3. Calculate cost basis for all current holdings using FIFO (First In, First Out) or another Revenue-accepted methodology
4. Identify gaps: Missing transactions, lost exchange access, closed platforms - document what you cannot recover
5. Consider voluntary disclosure if you have significant unreported gains from previous years
For Companies: Additional Complexities
If your limited company holds cryptocurrency, DAC8 creates a reporting mismatch problem that could trigger Revenue scrutiny.
The Balance Sheet Issue
Under Irish GAAP and IFRS, cryptocurrency holdings are assets that should appear on your company balance sheet. If your company bought Bitcoin in 2020 but never properly accounted for it, your filed accounts are incomplete.
When Revenue receives your company 2026 DAC8 report showing active crypto trading, they will compare it against your submitted accounts. Questions will follow:
· Why do 2026 reports show crypto activity but your 2025 accounts show no crypto holdings?
· What was the acquisition cost for crypto sold in 2026?
· Are there unreported capital gains?
· How were prior year accounts approved with this omission?
Historical Documentation Requirements
Unlike individuals who might claim ignorance of tax obligations, companies are held to higher standards. Directors have statutory responsibilities around accurate financial reporting.
If your company has been trading cryptocurrency without proper accounting treatment, you need to remediate immediately - you are now operating in the collection period, with 12 months before Revenue receives the data.
Action items for companies:
6. Conduct a crypto asset audit: Identify all company crypto holdings across all platforms and wallets
7. Obtain historical statements: Export complete transaction histories from 2017 (or first trade) onwards
8. Calculate cost basis properly: IFRS requires specific valuation methodologies for digital assets
9. Update accounting records: Restate prior years if necessary, with proper audit trail
10. Document corporate resolutions: Any decisions around crypto purchases, custody, or sales should be minuted
11. Separate personal vs corporate holdings: If directors have personally traded using company exchanges, untangle this immediately
12. Review director loan accounts: Crypto transfers between company and directors may create loan account implications
The Market Gap for Specialist Services
Traditional accounting practices generally lack the technical infrastructure and expertise to handle cryptocurrency accounting properly. The combination of blockchain transaction tracking, multiple exchange reconciliations, and IFRS digital asset treatment requires specialized knowledge.
As DAC8 implementation approaches, the need for accountants who understand both the technical aspects of cryptocurrency and Irish tax law has become acute - particularly for companies holding digital assets.
Common Misconceptions
"Crypto is anonymous, so Revenue cannot track me"
Cryptocurrency is pseudonymous, not anonymous. Every transaction is recorded permanently on public blockchains. The limitation was never visibility - it was linking blockchain addresses to real identities. KYC requirements at exchanges solved that problem years ago. DAC8 simply automates the data flow to tax authorities.
"Revenue does not have resources to chase everyone"
Correct. They do not need to. DAC8 works through risk-based selection. Revenue will run pattern matching: reported crypto activity vs filed tax returns. Discrepancies get flagged. Maybe 5-10 percent get examined. But which 5-10 percent? Are you confident you are not in that group?
The goal of automatic reporting is not universal enforcement - it is voluntary compliance through detection risk. When taxpayers know Revenue has the data and capability to check, compliance increases without enforcement increasing.
"Small amounts do not matter"
Revenue focus is typically on materiality, but DAC8 reports everything above minimal thresholds. If you are thinking "I only made 5,000 euro profit," remember that Revenue sees your gross transactions. 50,000 euro in trades generating 5,000 euro profit looks different than 5,000 euro in trades. Pattern matters, not just profit.
"I will deal with it when Revenue contacts me"
Possible, but expensive. Reconstructing years of transactions while responding to Revenue enquiries puts you in reactive mode. Penalties for late disclosure are steeper than proactive compliance. Professional fees skyrocket when work is urgent vs planned.
The Regulatory Timeline Reality
It is worth being realistic about enforcement timing. Exchanges are collecting data throughout 2026. Revenue will receive their first DAC8 reports by 31 January 2027 (covering all 2026 transactions). Integration into their systems, development of risk algorithms, and staff training will take additional time.
Likely enforcement pattern:
· 2027: Revenue receives data, begins systems integration, issues guidance
· 2027-2028: Early Revenue letters, probably targeting obvious discrepancies (500k euro in trades, 0 euro reported income)
· 2028-2029: Broader enforcement program, refined risk selection
· 2029+: Mature enforcement with sophisticated analytics
Does this mean you can wait? Depends on your risk tolerance and whether you want to prepare proactively or reactively.
What is certain: preparing your historical records during 2026 - while exchanges collect data but before Revenue receives it - positions you as someone who took compliance seriously. Scrambling in 2027 after Revenue has the data positions you as someone caught.
Revenue officers are human. Presentation matters.
Action Plan: What to Do Now (January-December 2026)
Immediate actions (Immediately (Q1 2026)):
· Export transaction history from every exchange used (CSV/API)
· Retrieve statements from any closed or inaccessible exchanges
· Document all wallet addresses you have used
· Map transfers between exchanges and wallets
· List all platforms: exchanges, DeFi protocols, NFT marketplaces
· Calculate current holdings across all wallets
· Determine cost basis using FIFO or other Revenue-accepted method
· Identify missing transactions and document gaps
· Review past tax returns for crypto reporting accuracy
For companies, additionally:
· Audit all company crypto holdings
· Review corporate resolutions and authorization for crypto purchases
· Separate company holdings from personal director holdings
· Assess balance sheet impact and restatement needs
· Calculate unrealized gains position
· Update accounting treatment for 2024/2025 filings
· Consider whether voluntary disclosure is appropriate
Professional Guidance vs Self-Service
If you have significant holdings, multiple exchanges, corporate crypto, or any uncertainty about your position, professional accounting advice becomes essential rather than optional.
Professional services provide:
· Expert judgment on complex transactions
· Defence-quality documentation for Revenue enquiries
· Corporate accounting integration
· Strategic tax planning advice
· Representation during Revenue audits
For straightforward situations - single exchange, moderate transaction volume, clear personal holdings - you may be able to manage compliance independently. For anything more complex, the cost of professional advice is typically far less than the cost of getting it wrong.
What We Are Seeing
As an accounting practice specializing in cryptocurrency accounting, we have observed several patterns in early 2026:
Awareness is low: Most Irish crypto holders still do not realize DAC8 is now active and collecting data. Those who do often underestimate its implications.
Guidance is absent: As of January 2026, Revenue has not published specific guidance on how they will use DAC8 data or what documentation standards they expect. We are operating on EU directives and international practice.
Historical records are messy: The majority of crypto holders we speak with have incomplete records, particularly from early years (2017-2019) when tax compliance was not front-of-mind.
Company accounting is worse: Corporate crypto holdings frequently are not properly reflected in filed accounts. Directors often mixed personal and company trading. The documentation gap is severe.
Final Perspective
DAC8 represents the maturation of cryptocurrency taxation. The era of "crypto operates outside traditional finance" is ending - not because governments banned it, but because they built the reporting infrastructure to track it like any other asset class.
This is not necessarily bad news. Regulatory clarity has benefits: institutional adoption increases, mainstream acceptance grows, and the "Wild West" reputation fades. But it does mean crypto holders need to approach compliance with the same seriousness as traditional investments.
The advantage of preparation is optionality. If you have clean records, documented cost basis, and defensible tax positions before Revenue receives data in early 2027, you can make strategic decisions from a position of strength rather than react from a position of panic when Revenue letters arrive in 2027-2028.
The reporting window is open. Revenue will receive your 2026 data in early 2027. You have approximately 12 months to ensure your historical records are defensible. Use this time wisely.
________________________________________________________________________________
About the Author
This article was prepared by Quant Finance Analytics Limited, an Irish accounting practice specializing in cryptocurrency and digital asset accounting. We provide crypto tax compliance, historical record reconstruction, and Revenue correspondence services for individuals and companies.
Disclaimer
This article provides general information about DAC8/CARF and should not be construed as tax advice specific to your situation. Irish tax law is complex and individual circumstances vary. For specific guidance on your crypto tax position, consult a qualified tax advisor.
Contact
To discuss your DAC8 preparation needs, contact us at info@quantifinance.ie.