Crypto Taxation: 47 states adhere to CARF!

The Crypto-Asset Reporting Framework (CARF) is an initiative by the Organisation for Economic Co-operation and Development (OECD). Introduced last year, CARF aims to foster international, automatic, and transparent exchange of tax information on cryptocurrencies. Several countries, including France, have adhered to it.

Towards the Supranational Transposition of the Crypto-Asset Reporting Framework

The Crypto-Asset Reporting Framework (CARF), initiated last year by the OECD, has just seen a new development. Indeed, 47 states around the world have collectively committed to integrate it into their respective national legal systems by 2027.

The essence of this commitment was expressed in a declaration published this Friday, 10 November. It highlights a common willingness to integrate this crypto standard coherently, broadly, and swiftly, which is considered particularly important for the tax authorities.

The adherence of these states to CARF should help to improve the efficiency of tax compliance measures and the fight against crypto tax evasion. This, in turn, will increase, among other things, the public revenues of the concerned countries.

This includes the 38 OECD member states, in addition to some jurisdictions with preferential taxation such as Gibraltar and the Cayman Islands. However, some key states are not engaged. This includes China, Hong Kong, the United Arab Emirates, Russia, Turkey, and all the countries in Africa. This highlights an approach to adherence focused on Europe.

Issuing a collective pledge, 47 national governments stated their commitment to incorporate the CARF into their domestic legal frameworks. #Adoption #Taxhttps://t.co/ddfpn9vOFm

— Blockchain Reporter (@blockchainrptr) November 10, 2023

CARF, the Driving Force Behind Global Crypto Reporting Standards ?

Several crypto analysts view CARF as the spearhead of global efforts in crypto reporting. This is likely due to the fact that the initiative aims to increase the visibility of international crypto transactions.

However, it is worth noting that other international protocols for the exchange of tax information involving cryptocurrencies are emerging. This includes the DAC8 directive on cryptos, adopted last September by the European Parliament.

The standard is expected to allow tax authorities to monitor and evaluate any crypto transaction made by individuals or companies. This would be the case in any member state of the European Union (EU).

It is conceivable that the convergence of CARF and DAC8 is not coincidental. It reflects an approach to the surveillance and regulation of income from cryptocurrencies on a global scale. The international community appears to be adapting to the growing challenges of the crypto industry. This is being done by working to make tax systems robust enough to respond to the complexities of the digital economy.