The Crypto-Asset Reporting Framework (CARF) is an initiative of the Organization for Economic Co-operation and Development (OECD). Introduced last year, CARF aims to promote the international, automatic and transparent exchange of tax information on cryptos. Several countries such as France have joined.
Towards the supranational transposition of the crypto-asset reporting framework
The crypto-asset reporting framework (CARF) initiated last year by the OECD has just undergone a new development. Indeed, 47 states around the world have collectively committed to integrating it into their respective national legal systems by 2027.
The quintessence of this commitment was expressed in a declaration published this Friday, November 10. This highlights a common desire favorable to the coherent, generalized and rapid integration of this crypto standard considered particularly important for the tax authorities.
The accession of these States to the CARF should help improve the effectiveness of tax compliance and anti-crypto tax evasion measures. Which, ultimately, will increase, among other things, the public revenues of the countries concerned.
These include the 38 OECD member states, in addition to certain jurisdictions with advantageous taxes such as Gibraltar and the Cayman Islands. However, some key states are not engaged. This is the case for China, Hong Kong, the United Arab Emirates, Russia, Turkey and all African countries. This highlights a Europe-centric approach to accession.
CARF, the driving force behind global crypto reporting standards?
Many crypto analysts see CARF as spearheading global crypto reporting efforts. This is probably linked to the fact that the initiative pursues the objective of increasing the visibility of international crypto transactions.
However, it should be noted that other international protocols for exchanging tax information involving cryptocurrencies are emerging. We think in particular of the DAC8 directive on cryptos, adopted last September by the European Parliament.
The standard is expected to allow tax authorities to monitor and assess any crypto transaction carried out by individuals or businesses. This, in any member state of the European Union (EU).
We imagine that the convergence of CARF and DAC8 is not a coincidence. It reflects an approach to monitoring and regulating revenues from cryptocurrencies on a global level. The international community appears to be adapting to the growing challenges of the crypto industry. This, by working to make tax systems robust enough to respond to the complexities of the digital economy.
Receive a summary of the news in the world of cryptocurrencies by subscribing to our new service daily and weekly so you don’t miss anything of the Tremplin.io essentials!
