Tax Transparency Standard to Combat Crypto-Related Tax Evasion
Forty-eight countries across six continents have committed to a new tax transparency standard starting in 2027 to fight crypto-related tax evasion. Countries such as Ireland, Austria, France, Germany, Italy, Croatia, Japan, South Korea, the US, and Canada have all signed on, while notable players like China, Russia, and India have not. South Africa is the only African country that has joined. The Crypto-Asset Reporting Framework (CARF), announced by the UK, is the latest tax transparency standard established by the Organisation for Economic Co-operation and Development (OECD).
Implementing the New Framework
The countries have announced their intention to implement the CARF by 2027, with the aim of commencing exchanges. Additionally, they have committed to implementing amendments to the Common Reporting Standard (CRS), another existing tax transparency standard for the exchange of financial account information. The final agreement on the CARF was reached in March of this year, following two years of negotiation. It was finalized in June.
“The consistent, timely, and widespread CARF implementation will enhance the signatories’ ability to ensure tax compliance,” the joint statement reads.
The signatory jurisdictions, in their joint statement, emphasized their active participation in crypto markets. They have expressed their intention to swiftly transpose the CARF into domestic law. Singapore, which actively participated in the development of the CARF at the OECD, has stated that it will work with the industry to provide guidance for CARF implementation.
“Singapore abides by the internationally agreed standards for the Exchange of Information (EOI) for tax transparency. It is also a member of the Global Forum on Transparency and Exchange of Information for Tax purposes (Global Forum),” stated the Inland Revenue Authority (IRAS).
The signatories have invited other jurisdictions to join them in implementing the CARF. This move comes as countries around the world are increasingly focusing on crypto-related tax regulations.
- Ireland, Austria, France, Germany, Italy, Croatia, Japan, South Korea, the US, and Canada have committed to a new tax transparency standard to combat crypto-related tax evasion.
- The Crypto-Asset Reporting Framework (CARF) is the latest tax transparency standard announced by the UK.
- The countries have announced their intention to implement the CARF by 2027 and to implement amendments to the Common Reporting Standard (CRS).
- The joint statement emphasizes the importance of consistent CARF implementation to ensure tax compliance and clamp down on tax evasion.
- Singapore, an active participant in the development of the CARF, will provide guidance for CARF implementation.
- The signatory jurisdictions invite other countries to join them in implementing the CARF.