The Organisation for Economic Co-operation and Development (OECD) has created a new global tax transparency framework for automatically exchanging information related to crypto assets between countries.
Crypto-Asset Reporting Framework (CARF) would allow countries to track the cross-border transfer of crypto assets. According to the OECD statement, CARF will be presented to G20 Finance Ministers this week in Washington, DC. The G20 had in April 2021 mandated the OECD to develop a framework for the automatic exchange of tax-relevant information on crypto assets.
Sudhir Kapadia, Partner, tax & regulatory services, EY India, said, “Regulators and tax authorities around the world have been grappling with the question of tracking, regulating and taxing crypto transactions given the proliferation and increasing dispersion of this form of exchange.”
The new transparency initiative, developed with G20 countries, comes against the backdrop of the rapid adoption of crypto-assets for a wide range of financial uses and investments.
While some forward-looking countries have spotted an opportunity to attract crypto entrepreneurs to set up a base by providing an enabling environment for crypto operations, other countries have been more concerned about the potential misuse of crypto assets to fuel money laundering, and prohibited end uses.