Global Governments Pledge to Implement Crypto-Asset Reporting Framework
Almost 50 national governments have committed to quickly adopting the Crypto-Asset Reporting Framework (CARF), an international standard for automatic exchange of information among tax authorities. The pledge, made on Nov. 10, aims to incorporate the CARF into domestic law systems.
The Organisation for Economic Cooperation and Development (OECD) introduced the CARF in 2022, in response to a G20 mandate from April 2021. This framework requires reporting on cryptocurrency and digital asset transactions, whether through intermediaries or service providers.
The signatories plan to activate information exchange agreements by 2027, with the goal of improving tax compliance and combatting evasion. The list includes all 38 OECD member states, as well as financial offshore havens like the UK’s Overseas Territories of the Cayman Islands and Gibraltar.
Challenges and Exclusions
However, notable exclusions from the pledge are China, Hong Kong, the United Arab Emirates, Russia, Turkey, Africa, and most Latin American countries. Additionally, the Directive on Administrative Cooperation (DAC8), a cryptocurrency tax reporting rule adopted by the Council of the European Union in October, is another international protocol being implemented to capture crypto income.
Hot Take: International Efforts to Regulate Cryptocurrency Taxes
As global governments commit to implementing the CARF framework for automatic exchange of information on crypto-assets, efforts are underway to improve tax compliance and clamp down on evasion. However, several key markets remain excluded from these initiatives, highlighting challenges in achieving comprehensive international cooperation in regulating cryptocurrency taxes.
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