The OECD on 10 October published a much-anticipated two-part document - the Crypto-Asset Reporting Framework (CARF) and Amendments to the Common Reporting Standard (CRS) - setting forth a global tax transparency compliance framework with model rules for the automatic reporting and exchange of taxpayer information between countries relating to financial accounts and crypto-assets. The CARF, which responds to a G20 request, will be presented to G20 Finance Ministers and Central Bank Governors at their 12-13 October meeting in Washington, DC.
The CRS, first adopted in 2014, was designed as a global framework for reporting, obtaining, and automatically exchanging information relating to financial accounts on an annual basis. However, the rapid adoption of the use of crypto-assets for a wide range of investments and financial intermediaries means that crypto-assets and related transactions are not comprehensively covered by the CRS and that tax administrators may not have adequate visibility into when taxpayers hold or engage in transactions involving crypto-assets.
The OECD amended the CRS and developed the stand-alone CARF as a complementary compliance framework intended to address this deficiency. Similar to the CRS, the CARF contains (1) model rules that can be enacted as domestic legislation and (2) related commentary to support legislative implementation. The implementation timelines for both the CARF and the CRS amendments will be determined at a future date in an effort to avoid overlapping rules and the potential for duplicate reporting.