OECD presents new transparency framework for crypto assets to G20

On 10 October 2022 the OECD delivered a new global tax transparency framework to provide for the reporting and exchange of information with respect to crypto assets.

The Crypto Asset Reporting Framework (CARF) responds to a G20 request that the OECD develop a framework for the automatic exchange of information between countries on crypto assets. The CARF will be presented to G20 Finance Ministers and Central Bank Governors for discussion at their next meeting on 12 and 13 October 2022 in Washington D.C, as part of the latest OECD Secretary-General’s Tax Report.

The new transparency initiative, developed together with G20 countries comes against the backdrop of a rapid adoption of the use of crypto-assets for a wide range of investment and financial uses. Unlike traditional financial products, crypto assets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having full visibility on either the transactions carried out or on crypto asset holdings. The crypto market has also given rise to new intermediaries and service providers, such as crypto asset exchanges and wallet providers, many of which currently remain unregulated.

As a result of these developments crypto assets and related transactions are not comprehensively covered by the OECD/G20 Common Reporting Standard (CRS), increasing the likelihood of their use for tax evasion while undermining the progress made in tax transparency through the adoption of the CRS. The CARF will ensure transparency with respect to crypto asset transactions, through automatically exchanging such information with the jurisdictions of residence of taxpayers on an annual basis, in a standardized manner similar to the CRS.

The OECD has also put forward to the G20 a set of further amendments to the CRS, intended to modernize its scope to comprehensively cover digital financial products and to improve its operation, considering the experience gained by countries and business. As with the CARF, this work will be complemented with an update to the international legal and operational mechanisms for the automatic exchange of information pursuant to the amended CRS, as well as with a coordinated timelines to bring the agreed amendments into effect.

More information to be found in the OECD press release of 10 October 2022.