The UK, along with 48 other countries, have agreed to the 'Crypto-Asset Reporting Framework' to help combat criminals using cryptoassets to evade and avoid billions in missing tax.
HM Treasury has reported that the UK spearheaded the Crypto-Asset Reporting Framework (CARF) as the Organisation for Economic Co-operation and Development's (OECD) latest flagship tax transparency standard. It is expected to take effect in time for exchanges with other countries to start in 2027.
The CARF will build on the existing system tax authorities use to share information with each other, called the Common Reporting Standard. It will mean crypto platforms will need to start sharing taxpayer information with tax authorities, which currently they do not do. This will ensure authorities can exchange information to enforce tax compliance.
HM Treasury says that framework will be essential to counter the increasing level of tax avoidance brought about by the rapid growth of the global crypto market, with some estimates suggesting that tax non-compliance on crypto-asset holdings could range from as high as 55% to 95%.
Useful guides on this topic
Cryptoassets: How are Bitcoin, cryptocurrencies or cryptoassets taxed in the UK?
How do you tax Bitcoin? Are cryptocurrency or cryptoasset gains or profits, taxable? Can you obtain tax relief if you make losses on Bitcoin? Gains on transactions in cryptoassets are potentially taxable in the same way as other investments.
Consultation: Crypto-Asset Reporting Framework
The OECD has published a consultation 'Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard'. It is seeking views on bringing these new financial assets into the scope of the Common Reporting Standard (CRS). This affects the way in which banks and exchanges handle crypto accounts and payments.
External links
Read the OECD Crypto-Asset Reporting Framework (CARF)
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