Top-up tax forms published
The Czech Financial Administration has published the filing forms relating to the Czech qualified domestic top-up tax and the GloBE top-up tax which were introduced in the Czech Republic as of 2024 under Act No…
DAC 8: New reporting obligations for providers of crypto-asset services
The ambiguity surrounding crypto-assets causes regulatory and administrative challenges for governments, businesses, and individuals worldwide. Tax authorities face a lack of information in the area of crypto-asset trading. This might potentially lead to loss in collected taxes by the state. In response to this situation, the eighth Directive on Administrative Cooperation (“the DAC 8”) has been prepared, introducing new reporting obligations for providers of services related to crypto-assets (“providers”).
The DAC 8 entered into force on 13 November 2023 and will apply to most EU Member States starting from 1 January 2026. Member States are required to implement the DAC 8 into their national law by 31 December 2025 at the latest. Therefore, the Government of the Czech Republic submitted a bill to the Chamber of Deputies to amend Act No. 164/2013 Coll. on. International Cooperation in Tax Administration and on Amendments to Other Related Acts at the end of August 2024.
Under the current version of the bill providers will be required to report mainly the following types of transactions:
- Exchange transactions, which include the exchange of one type of crypto-assets either for another type of crypto-assets or for fiat currency;
- Transfers of crypto-assets to or from a crypto- user’s address or account registered with the provider; and
- Retail payment transactions, defined as transfers of crypto-assets in form of payment for goods or services exceeding USD 50,000.
What are currently the obligations stated under this bill?
- Registration obligation: Providers established in the Czech Republic will have to notify the commencement of their activities and register with the competent authority within the deadline for filing notifications of notifiable transactions.
- Reporting obligation: Providers will be required to report all transactions conducted on behalf of their users. Notifications must be submitted electronically by 30 April of the calendar year following the year in which the transactions were made.
- Verification and discovery: Providers must verify the identity and residency of their crypto-asset users, which would mean collecting all necessary information. If users do not cooperate within the verification process, providers will be prohibited from conducting transactions on their behalf.
- Information obligation: Providers must inform users about the collection and transmission of their data to the relevant tax authority before submitting the first notification.
- Document retention: Providers are required to retain all documents related to the screening, verification, and information obligations for ten years counted from the last day of the notification period.
The bill introduces penalties for failure to comply with these obligations. The tax administrator may impose a fine of up to CZK 1,500,000 on a provider that breaches the rules in respect to verification, screening, document retention, providing information, or notification.
The bill and information related to the approval process can be found on the Government’s information portal at odok.cz.
We will closely monitor developments in this area and inform you as soon as there are any further updates in the legislative process.
