- Nearly 50 national governments pledge to implement new international tax reporting standards for cryptocurrency transactions.
- The commitment is made through the Crypto-Asset Reporting Framework (CARF) developed by OECD.
- CARF involves automatic information sharing between tax authorities on crypto transactions.
Nearly 50 national governments have jointly pledged to implement new international tax reporting standards for cryptocurrency transactions.
The commitment comes via a statement published on November 10th regarding the Crypto-Asset Reporting Framework (CARF). CARF was developed by the Organisation for Economic Co-operation and Development (OECD) based on a mandate from G20 nations in April 2021.
Under CARF, countries agree to automatic information sharing between tax authorities on crypto transactions, including details on the type of asset and whether exchanges or service providers were used.
Signatories for crypto tax include all 38 OECD member states
The 50 signatories to CARF include all 38 OECD member states, along with notable financial hubs like the Cayman Islands, Gibraltar, Brazil, and Chile. However, major cryptocurrency markets such as China, Hong Kong, the UAE, Russia, and Turkey did not sign. No African nation signed on either.
According to the joint statement, adopting CARF domestically will “improve our ability to ensure tax compliance and clamp down on tax evasion, which reduces public revenues.”
The countries aim to have information-sharing agreements activated by 2027. CARF is not the only new cryptocurrency tax reporting standard in development.
In October, the European Union formally adopted the 8th iteration of its Directive on Administrative Cooperation (DAC8). Under DAC8, EU tax authorities will be able to monitor every crypto transaction by individuals or entities across member states.
Global coordination on cryptocurrency tax reporting seeks to eliminate loopholes for assets that often cross borders. However, some nations are moving faster than others to capture revenue from digital asset growth.