The Organization for Economic Co-operation and Development (OECD) has released its new tax reporting framework, the Crypto-Asset Reporting Framework (CARF).

The framework, which was approved in August, ensures “the collection and automatic exchange of information on transactions for relevant crypto”.

This is the first global tax transparency framework of its kind and will allow tax authorities to report and exchange information on crypto assets, including details of transactions and current ownership.

The definition of crypto assets “includes assets that can be held and transferred in a decentralised manner, without the intervention of traditional financial intermediaries, including stablecoins, derivatives issued in the form of a crypto-asset and certain non-fungible tokens”.

Intermediaries and other service providers facilitating exchanges between relevant crypto assets, such as exchanges, brokers and ATM operators, will also be included in the scope of CARF.

They will have to report transactions on an annual basis. This information will be provided to global tax authorities, including HM Revenue & Customs in the UK.

Under CARF, the types of transactions that will have to be recorded include:

• Exchanges between relevant crypto assets and fiat currencies
• Reportable retail payment transactions using crypto valued over $50,000.

If crypto purchases are less than $50,000 it is the responsibility of the crypto asset provider to report the transaction as a merchant sale through their annual report to their national tax authority.

Raz Miah, Head of Grunberg & Co’s crypto tax service G + Co 3.0, said: “This is big news for the global crypto industry and will place an additional burden on hundreds of intermediaries that manage crypto asset transactions.

“It will also provide a rich source of data on taxpayers who hold or transact in crypto assets to tax authorities around the world, allowing them to take action to recover unpaid tax or enforce penalties for non-compliance with existing rules.”

Raz said this move highlighted the importance of seeking out professional tax advice for those operating in the crypto asset market, from individual investors to those exchanges, creators and other businesses are the top of the industry.

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