The Paradox of Reporting Without Visibility: How DAC8 And CARF Expose the Limits of Transparency-Based Taxation in Crypto-Assets

Abstract

The Markets in Crypto-Assets Regulation, DAC8, and the OECD Crypto-Asset Reporting Framework together form an emerging normative ecosystem meant to bring crypto-asset activity within the reach of tax authorities. This study asks whether that ecosystem affords a coherent and complete framework for the international taxation of crypto-assets, or whether the heterogeneity of classifications between financial-market law and tax law perpetuates the conditions for an incomplete taxation that procedural transparency cannot, on its own, remedy. The study proceeds in two parts. Part I analyses the transparency framework. Its definitions are settled, but its reach is not: DAC8 and CARF render transactions visible only where a reporting intermediary exists, which places decentralised finance and self-custody outside the system altogether. Part II asks what becomes of the information once it has been reported. Comparing the substantive tax treatment of staking, mining, airdrops, non-fungible tokens, stablecoins and decentralised-finance income across the principal jurisdictions, it finds that visibility does not in itself produce taxation, because states do not qualify what they see in the same way. Beneath the divergence, the study identifies an uncoordinated drift toward functional treatment. It argues that hard substantive harmonisation is foreclosed in practice, globally for want of any authority empowered to impose it and within the European Union for want of the unanimity that direct taxation requires. What remains available is coordination rather than harmonisation: the neutralisation of cross-border mismatches on the model of the linking rules developed against hybrid mismatches, a technique that leaves each state in possession of its own classification. The central finding of the study is structural. The absence of an identifiable counterparty constrains transparency, substantive qualification, and any coordinated remedy alike, so that the framework is coherent across the intermediated crypto economy and structurally incomplete beyond it. The same limit that arises from the architecture of the technology arises, for reasons of its own, from the consent-based architecture of the international legal order, and together they mark the boundary within which the international taxation of crypto-assets can be made to work.