OECD's Crypto-Asset Reporting Framework

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G20 putting crypto under the microscope...

The OECD delivered today a new global tax transparency framework to provide for the reporting and exchange of information with respect to crypto-assets.

The Crypto-Asset Reporting Framework (CARF) responds to a G20 request that the OECD develop a framework for the automatic exchange of information between countries on crypto-assets. The CARF will be presented to G20 Finance Ministers and Central Bank Governors for discussion at their next meeting on 12-13 October in Washington D.C, as part of the latest OECD Secretary-General’s Tax Report.

The new transparency initiative, developed together with G20 countries, comes against the backdrop of a rapid adoption of the use of crypto-assets for a wide range of investment and financial uses. Unlike traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having full visibility on either the transactions carried out or on crypto-asset holdings. The crypto market has also given rise to new intermediaries and service providers, such as crypto-asset exchanges and wallet providers, many of which currently remain unregulated.

These developments mean that crypto-assets and related transactions are not comprehensively covered by the OECD/G20 Common Reporting Standard (CRS), increasing the likelihood of their use for tax evasion while undermining the progress made in tax transparency through the adoption of the CRS.

“The Common Reporting Standard has been very successful in the fight against international tax evasion. In 2021, over 100 jurisdictions exchanged information on 111 million financial accounts, covering total assets of EUR 11 trillion,” OECD Secretary-General Mathias Cormann said. “Today’s presentation of the new crypto-asset reporting framework and amendments to the Common Reporting Standard will ensure that the tax transparency architecture remains up-to-date and effective.”

In this vein, the CARF will ensure transparency with respect to crypto-asset transactions, through automatically exchanging such information with the jurisdictions of residence of taxpayers on an annual basis, in a standardised manner similar to the CRS.

The CARF will target any digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions. Carve-outs are foreseen for assets that cannot be used for payment or investment purposes and for assets already fully covered by the CRS. Entities or individuals that provide services effectuating exchange transactions in crypto-assets for, or on behalf of customers would be obliged to report under the CARF.

The CARF contains model rules that can be transposed into domestic legislation, and commentary to help administrations with implementation. Over the next months, the OECD will be taking forward work on the legal and operational instruments to facilitate the international exchange of information collected on that basis of the CARF and to ensure its effective and widespread implementation, including the timing for starting exchanges under the CARF.

The OECD has also put forward to the G20 a set of further amendments to the CRS, intended to modernise its scope to comprehensively cover digital financial products and to improve its operation, taking into account the experience gained by countries and business. As with the CARF, this work will be complemented with an update to the international legal and operational mechanisms for the automatic exchange of information pursuant to the amended CRS, as well as with a coordinated timelines to bring the agreed amendments into effect.
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OECD Web Archive

web-archive.oecd.org

More:

https://www.oecd.org/tax/exchange-of-tax-information/crypto-asset-reporting-framework-and-amendments-to-the-common-reporting-standard.htm

 

[#48Fan]

More proof we are in the "then they fight you" stage.

 

[pmbug]

From October 2023:

OECD Secretary-General Mathias Cormann welcomed today’s announcement that 48 countries and jurisdictions intend to implement the OECD’s global tax transparency framework for the reporting and exchange of information with respect to crypto-assets by 2027.

“Today’s announcement of co‑ordinated international action on crypto-assets is a major step forward, marking another important milestone towards the widespread and co-ordinated approach to combat tax evasion through greater transparency and exchange of information,” OECD Secretary-General Mathias Cormann said. “We strongly welcome the extensive support being shown for quick action to make the international exchange of information collected under the OECD standard on crypto-asset reporting a reality. The international community can count on the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes to ensure that the tax transparency architecture remains both up-to-date and effective going forward.”

The Crypto-Asset Reporting Framework (CARF) is a key component of the International Standards for Automatic Exchange of Information in Tax Matters developed by the OECD under a G20 mandate. It provides for the automatic exchange of tax-relevant information on crypto-assets and comes against the backdrop of a rapid adoption of the use of crypto-assets for a wide range of investment and financial uses. Unlike traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having full visibility on either the transactions carried out or on crypto-asset holdings.

Following the delivery of the CARF to G20 Finance Ministers in October 2022, the G20 has asked the Global Forum on Transparency and Exchange of Information for Tax Purposes – the leading international body bringing together 168 countries and jurisdiction on the implementation of global transparency and exchange of information standards around the world – to build on its commitment and monitoring processes to ensure the widespread implementation of the CARF by relevant jurisdictions.

Since the finalisation of the legal and operational instruments of the CARF in June 2023, the Global Forum established a dedicated “CARF Group” to take the work forward. The crypto-asset reporting issue will be further discussed at the Global Forum’s 16th Plenary Meeting taking place in Lisbon, Portugal from 29 November to 1 December 2023.
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https://www.oecd.org/tax/exchange-of-tax-information/secretary-general-mathias-cormann-welcomes-pledge-by-48-countries-to-implement-global-tax-transparency-standard-for-crypto-assets.htm

The 48 are:

Armenia, Australia, Austria, Barbados, Belgium, Belize, Brazil, Bulgaria, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Netherlands, Norway, Portugal, Romania, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, the United Kingdom, and the United States of America; the Crown Dependencies of Guernsey, Jersey, and Isle of Man; and the United Kingdom’s Overseas Territories of the Cayman Islands and Gibraltar

Collective engagement to implement the Crypto-Asset Reporting Framework

www.gov.uk

Today:

The U.K. launched a consultation on its plans to implement the Organization for Economic Co-operation and Development's (OECD) crypto reporting framework on Wednesday following its spring budget speech.
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The OECD framework is a new standard that addresses tax non-compliance and is an update to an existing framework on offshore accounts. It is meant to ensure the exchange of information on transactions for relevant crypto across jurisdictions. The rules will come into force in 2026.
...

UK Launches Consultation on Implementing OECD Crypto Reporting Framework

The U.K. government believes implementing the reporting framework could draw in £35 million ($45 million) starting from 2026.

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