The electronic structure of high-quality van der Waals multiferroic CuCrP2S6 crystals was investigated by applying photoelectron spectroscopy methods in combination with DFT analysis. Using X-ray photoelectron and near-edge X-ray absorption fine structure (NEXAFS) spectroscopy at the Cu L2,3 and Cr L2,3 absorption edges, we determine the charge states of ions in the studied compound. Analyzing the systematic NEXAFS and resonant photoelectron spectroscopy data at the Cu/Cr L2,3 absorption edges allowed us to assign the CuCrP2S6 material to a Mott–Hubbard type insulator and identify different Auger-decay channels (participator vs spectator) during absorption and autoionization processes. Spectroscopic and theoretical data obtained for CuCrP2S6 are very important for the detailed understanding of the electronic structure and electron-correlations phenomena in different layered materials, which will drive their further applications in different areas, like electronics, spintronics, sensing, and catalysis.