Automatic Exchange of Information (AEOI) services: DAC7, DAC8 and CESOP

Digital platforms will be brought into scope initially in the EU and the UK, with the OECD expected to push for adoption globally from 2024. Information will be shared automatically between tax authorities to allow them to target under-declared income.

The new rules are likely to be extraterritorial in effect — platforms which facilitate transactions by EU and UK sellers will be required to report even where they are located elsewhere — unless their jurisdiction has signed up to the OECD’s exchange program.

The rules will affect digital platforms that allow sellers to:

• Rent immovable property (e.g., short-term accommodation)
• Provide personal services (e.g., on-demand household and professional services)
• Rent transport
• Sell goods (EU and UK only)

The proposed Crypto-Asset Reporting Framework will bring digital assets and cryptocurrency into the scope of AEOI reporting. The proposed rules are broad; they are likely to bring a substantial portion of the digital assets sector into the scope – including stablecoins, non-fungible tokens and many other digital assets as well as cryptocurrencies themselves.

Not only the cryptonative clients, but also many financial institutions will find themselves in scope of these rules as they bring their own cryptocurrency and digital asset offerings to market.

The OECD has proposed an expansion to the CRS that would bring e-money into scope alongside banking and asset management services. The proposed rules treat e-money in the same way as a deposit account — requiring e-money providers to collect self-certifications from users and report where the user is resident in a reportable jurisdiction.