Nearly 50 Countries Collaborate on Automatic Information Exchange for Crypto Trading
A coalition of nearly 50 nations, including the US and the UK, is working together to enable automatic information exchange between cryptocurrency trading firms and tax agencies. This initiative aims to ensure tax compliance and prevent tax evasion in the rapidly growing crypto-asset market.
Creation of the Crypto-Asset Reporting Framework (CARF)
The government of the United Kingdom has announced the partnership to create the Crypto-Asset Reporting Framework (CARF). The CARF is a new international standard developed by the Organisation for Economic Co-operation and Development (OECD) to facilitate the automatic exchange of information between tax authorities on crypto exchanges. It is designed to improve global tax transparency and combat offshore tax avoidance and evasion.
International Commitment
Other countries that have joined this effort include Japan, Mexico, Korea, Brazil, Italy, South Africa, Romania, Canada, Spain, Switzerland, Germany, South Korea, France, and Singapore. These jurisdictions are committed to implementing CARF by 2027 to ensure timely and consistent exchanges of information between tax authorities.
Final Agreement and Implementation
A joint statement reveals that the final agreement for CARF was reached in March 2023 after two years of negotiation. The signatory jurisdictions intend to implement the framework by 2027 to commence exchanges of information in an effort to improve tax compliance and clamp down on tax evasion.
Hot Take
In conclusion, nearly 50 countries are teaming up to establish a new international standard for automatic information exchange between crypto trading firms and tax agencies. This collaboration aims to enhance global tax transparency, combat offshore tax avoidance and evasion while ensuring timely implementation of the framework by 2027.
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