Changes on the taxation of crypto assets in Luxembourg

On 24 July 2025, the Luxembourg government introduced draft law n°8592 to Parliament, initiating the transposition of the EU Directive 2023/2226 (DAC8) into Luxembourg law. DAC8 expands the mandatory reporting and information exchange scope to include crypto-asset service providers (CASPs) and crypto-asset operators, both resident and non-resident (if they serve Luxembourg/EU clients).

• CASPs will be required to register, apply strict due diligence, and annually report information on users and transactions involving crypto assets to the Luxembourg Tax Authorities.

• Service providers already registered under MiCAR will be identified and communicated by the CSSF, and must comply with DAC8 rather than duplicating registration efforts.

• The first declarations under these new obligations will refer to the 2026 tax year and must be filed by June 2027, with exchange of information between tax authorities occurring by September 2027.

Practical impact of new taxation rules

Crypto-asset transactions will be subject to enhanced transparency through automatic exchange of reported information. This aims to align with the OECD Crypto-Asset Reporting Framework (CARF) and reinforce anti-money laundering and tax evasion measures.

• CASPs must collect and verify client identification, undertake due diligence, and annually report both client and transactional data for reportable crypto asset activities.

• Regulatory scope covers not only Luxembourg-based operators but also foreign platforms serving Luxembourg or EU users.

• The new framework does not itself change the actual taxation principles for individuals or entities (e.g., capital gains, commercial versus speculative income), but it improves monitoring and cross-border information flows for tax compliance.

Application timeline

• Draft law n°8592 awaits full parliamentary adoption before the end of 2025.

• The new rules take effect from 1 January 2026; first reporting covers the 2026 calendar year, with information exchange between authorities in September 2027.

No change in underlying tax treatment

The fundamental approach for how crypto gains are taxed in Luxembourg (capital gains, speculative gains, or commercial profits) has not changed in the last three months. However, the forthcoming regulatory overhaul will require far more robust compliance and due diligence by service providers and investors dealing with crypto assets in/from Luxembourg.

Regarding individual Crypto holders

Draft Law 8592 does not change the way individuals’ crypto gains are taxed, but it has important effects for individual crypto holders who use platforms or custodians subject to the new reporting regime. The key parts affecting individual crypto users are as follows:

Identification and reporting as “Reportable Users”

Individual EU-resident crypto holders who are clients of a reporting Crypto-Asset Service Provider (CASP) fall under the definition of “reportable users”.

CASPs are required to perform due diligence to identify reportable users, which includes obtaining a self-certification and verifying personal identification.

These procedures apply to both new and pre-existing clients as of 1 January 2026, with a transition period for legacy accounts.

Data collected and transmitted

CASPs must annually report to the Luxembourg Tax Authorities detailed information about reportable user accounts, transactions, and holdings. This includes:

• User identity (name, address, country of residence)

• Account or wallet identifiers

• Annual total gross amounts received, paid, or exchanged

• Details of crypto assets involved.

The tax authorities will transmit this information to the tax authorities in individuals’ country of residence (within the EU) via automatic information exchange by September each year.

Transparency, compliance & user impact

Individual crypto holders face more tax transparency: all relevant information on their crypto activity held with reportable platforms will be reported regardless of whether tax is due. Reports for the 2026 tax year will be filed by June 2027, and the first automatic data exchange will occur by September 2027.

The rules do not directly impose new taxes on individuals, but they allow authorities to detect undeclared gains or assets based on CASP reporting.

Exemptions: Users who are listed companies, governments, certain international organisations, and central banks are excluded from reporting. Most individuals will not fall under these carve-outs and are therefore considered reportable users.

Penalties and enforcement

Though individuals are not directly penalised under the Draft Law, CASPs face fines up to €250,000 for failing to register, perform due diligence, or report accurately.

In summary, Draft Law 8592 introduces new reporting and due diligence requirements for platforms and custodians that make individual holders’ crypto activities much more transparent to tax authorities, without changing the underlying tax regime for individuals as such.

How reported crypto data may be used for non‑tax purposes

Under Draft Law 8592, crypto asset data reported under DAC8 may be used for several non-tax purposes by Luxembourg and other EU authorities. The law specifically expands the allowed use of reported and exchanged information beyond direct taxation.

Permitted Non-Tax Uses

The reported crypto data can be accessed and used for the assessment, administration and enforcement of VAT (Value Added Tax), other indirect taxes, customs duties, and financial regulations.

Anti-money laundering (AML): Authorities may use the data to strengthen the fight against money laundering and to counter the financing of terrorism.

Enforcement of other regulatory measures: Collected information can be used for policy objectives, such as monitoring and enforcement connected to financial crime, compliance checks, and the proper functioning of customs rules.

Broader Information Sharing

Automatic exchange rules allow this information to be shared across EU tax and potentially other competent regulatory authorities, amplifying cross-border transparency for both tax and financial crime purposes.

GDPR and Data Use Limitations

While data sharing for non-tax purposes is allowed under DAC8, usage remains subject to the EU General Data Protection Regulation (GDPR), meaning authorities must have a valid purpose, implement safeguards, and adhere to data minimisation principles when processing crypto asset data for non-tax investigations or enforcement.

Any crypto data reported under the new Luxembourg law may be used not just to check tax compliance, but also for VAT, indirect tax, customs, AML, counter-terrorist financing, and other regulatory enforcement purposes, subject to overarching EU data protection rules.

For more details on the principles of the taxation of crypto-assets, please refer to our article on the taxation of crypto-assets in Luxembourg.