The OECD’s Crypto-Asset Reporting Framework (CARF) establishes global standards for monitoring, reporting, and exchanging information on crypto transactions. Designed to combat tax evasion, CARF mandates reporting from exchanges, intermediaries, and service providers on activities involving NFTs, crypto-fiat trades, and wallet transfers. While the framework expands definitions beyond FATF standards and promotes international cooperation, challenges remain around decentralized platforms, reliable identification of wallet owners, and enforcement in cross-border contexts.The OECD’s Crypto-Asset Reporting Framework (CARF) establishes global standards for monitoring, reporting, and exchanging information on crypto transactions. Designed to combat tax evasion, CARF mandates reporting from exchanges, intermediaries, and service providers on activities involving NFTs, crypto-fiat trades, and wallet transfers. While the framework expands definitions beyond FATF standards and promotes international cooperation, challenges remain around decentralized platforms, reliable identification of wallet owners, and enforcement in cross-border contexts.

The Crypto Transparency Revolution Nobody Asked For

6 min read

Abstract and 1. Introduction

  1. Bitcoin and the Blockchain

    2.1 The Origins

    2.2 Bitcoin in a nutshell

    2.3 Basic Concepts

  2. Crypto Exchanges

  3. Source of Value of crypto assets and Bootstrapping

  4. Initial Coin Offerings

  5. Airdrops

  6. Ethereum

    7.1 Proof-of-Stake based consensus in Ethereum

    7.2 Smart Contracts

    7.3 Tokens

    7.4 Non-Fungible Tokens

  7. Decentralized Finance and 8.1 MakerDAO

    8.2 Uniswap

    8.3 Taxable events in DeFi ecosystem

    8.4 Maximal Extractable Value (MEV) on Ethereum

  8. Decentralized Autonomous Organizations - DAOs

    9.1 Legal Entity Status of DAOs

    9.2 Taxation issues of DAOs

  9. International Cooperation and Exchange of Information

    10.1 FATF Standards on VAs and VASPs

    10.2 Crypto-Asset Reporting Framework

    10.3 Need for Global Public Digital Infrastructure

    10.4 The Challenge of Anonymity Enhancing Crypto Assets

  10. Conclusion and References

10.2 Crypto-Asset Reporting Framework

The Crypto Assets Reporting Framework introduced by the OECD addresses the challenges posed by crypto assets in the realm of taxation, specifically addressing the lack of taxpayer information. This framework establishes guidelines and standards for the reporting and automatic exchange of information regarding crypto asset transactions among tax authorities globally. With the rapid proliferation of crypto assets and increase in their market capitalization, the OECD recognized the imperative to ensure transparency and compliance within this evolving landscape.

\ The CARF seeks to enable tax authorities to effectively monitor and regulate crypto asset transactions, to help them combat tax evasion. By establishing clear reporting requirements for crypto asset transactions, the framework aims to enhance tax compliance. Moreover, by facilitating the exchange of information among tax authorities across jurisdictions, it fosters international cooperation in addressing the unique tax challenges posed by crypto assets. Besides providing a framework for multilateral and bilateral agreements for exchange of information, it also provides an XML schema for information exchange.

\ The CARF[160] is similar to the Common Reporting Standard (CRS) developed by the OECD which helps jurisdictions to obtain offshore accounts information through annual automatic exchange of information. It defines the term “Relevant Crypto-Asset” which means “any Crypto-Asset that is not a Central Bank Digital Currency, a Specified Electronic Money Product or any Crypto-Asset for which the Reporting Crypto Asset Service Provider has adequately determined that it cannot be used for payment or investment purposes.” This definition includes crypto assets like NFTs and excludes specific categories of crypto assets like CBDCs. It makes the following three types of transactions reportable to tax authorities:

\ • exchanges between Relevant Crypto-Assets and Fiat Currencies;

\ • exchanges between one or more forms of Relevant Crypto-Assets; and

\ • Transfers (including Reportable Retail Payment Transactions) of Relevant Crypto-Assets.

\ The amount and details of units of crypto assets transferred to unhosted wallets are also required to be collected and retained for 5 years. The individuals or entities carrying out transactions related to crypto assets are known as “Reporting Crypto-Asset Service Providers. A Reporting Crypto-Asset Service Provider is defined as ‘any individual or Entity that, as a business, provides a service effectuating Exchange Transactions for or on behalf of customers, including by acting as a counterparty, or as an intermediary, to such Exchange Transactions, or by making available a trading platform.’

\ The commentary to the CARF clarifies the applicability of the definition to individuals and entities like software developers and decentralised exchanges. It states “An individual or Entity that is making available a platform that solely includes a bulletin board functionality for posting buy, sell or conversion prices of Relevant Crypto-Assets would not be a Reporting Crypto-Asset Service Provider as it would not provide a service allowing users to effectuate Exchange Transactions. For the same reason, an individual or Entity that solely creates or sells software or an application is not a Reporting CryptoAsset Service Provider, as long as it is not using such software or application for the provision of a service effectuating Exchange Transactions for or on behalf of customers.”

\ The Reporting Crypto-Asset Service Provider are required to submit reports on Reportable Users[161] and also undertake due diligence on the customers, both individuals and entities. They are required to report the following information regarding Crypto-Asset Users that are Reportable Users or that have Controlling Persons that are Reportable Persons:

\

  • Name

    \

  • Address

    \

  • Jurisdiction(s) of Residence

    \

  • Tax Identification Number(s)

    \

  • Date and Place of Birth

\ The name, address and identifying information of the Reporting Crypto-Asset Service Provider along with details of ‘Relevant Transactions’ need to be provided. Tax Identification Number (TIN) and Place of Birth may not be required to be reported if the domestic law does not require collecting the information or TIN has not been issued by the reportable jurisdiction. The information is to be obtained on a self-certification basis and its reasonableness needs to be confirmed relying on other information collected by the Reporting Crypto-Asset Service Provider, like AML/KYC related information.

\ The CARF is an amendment to CRS and based on a separate legal framework from the CRS, which makes it possible for countries to implement CARF without signing up for CRS (Falcao & Michel, 2023). The definitions of Relevant Crypto-Assets and Reporting Crypto-Asset Service Provider are wider than the corresponding FATF definitions. This can enable tax authorities to obtain tax related information for a wider gamut of crypto assets and from a larger set of exchanges/intermediaries. However, the determination of place of residence of a taxpayer might be a challenge in case of decentralized exchanges which would likely qualify as Reporting Crypto-Asset Service Provider.

\ Although the XML Scheme standardizes the information exchange but absence “of any technically proven means of identifying the VASP that manages the beneficiary wallet exhaustively, precisely, and accurately in all circumstances and from the VA address alone” as acknowledged by FATF, would also be a challenge for CARF as self-declaration based due diligence and blockchain analytics based attribution of crypto asset addresses to natural and legal persons might not provide reliable and accurate information for levy of taxes. Also, the information is provided annually which might lead to flight of assets in tax fraud cases.

\

:::info Author:

(1) Arindam Misra.

:::


:::info This paper is available on arxiv under CC BY 4.0 DEED license.

:::

  1. https://www.oecd.org/tax/exchange-of-tax-information/crypto-asset-reporting-framework-andamendments-to-the-common-reporting-standard.pdf

    \

  2. D Section IV: Defined Terms

\

Market Opportunity
CROSS Logo
CROSS Price(CROSS)
$0.10346
$0.10346$0.10346
-4.95%
USD
CROSS (CROSS) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Tom Lee’s BitMine Hits 7-Month Stock Low as Ethereum Paper Losses Reach $8 Billion

Tom Lee’s BitMine Hits 7-Month Stock Low as Ethereum Paper Losses Reach $8 Billion

The post Tom Lee’s BitMine Hits 7-Month Stock Low as Ethereum Paper Losses Reach $8 Billion appeared on BitcoinEthereumNews.com. In brief Shares of BitMine Immersion
Share
BitcoinEthereumNews2026/02/06 04:47
MYX Finance price surges again as funding rate points to a crash

MYX Finance price surges again as funding rate points to a crash

MYX Finance price went parabolic again as the recent short-squeeze resumed. However, the formation of a double-top pattern and the funding rate point to an eventual crash in the coming days. MYX Finance (MYX) came in the spotlight earlier this…
Share
Crypto.news2025/09/18 02:57
How The ByteDance App Survived Trump And A US Ban

How The ByteDance App Survived Trump And A US Ban

The post How The ByteDance App Survived Trump And A US Ban appeared on BitcoinEthereumNews.com. WASHINGTON, DC – MARCH 13: Participants hold signs in support of TikTok outside the U.S. Capitol Building on March 13, 2024 in Washington, DC. (Photo by Anna Moneymaker/Getty Images) Getty Images From President Trump’s first ban attempt to a near-blackout earlier this year, TikTok’s five-year roller coaster ride looks like it’s finally slowing down now that Trump has unveiled a deal framework to keep the ByteDance app alive in the U.S. A look back at the saga around TikTok starting in 2020, however, shows just how close the app came to being shut out of the US – how it narrowly averted a ban and forced sale that found rare bipartisan backing in Washington. Recapping TikTok’s dramatic five-year battle When I interviewed Brendan Carr back in 2022, for example, the future FCC chairman was already certain at that point that TikTok’s days were numbered. For a litany of perceived sins — everything from the too-cozy relationship of the app’s parent company with China’s ruling regime to the app’s repeated floating of user privacy — Carr was already convinced, at least during his conversation with me, that: “The tide is going out on TikTok.” It was, in fact, one of the few issues that Washington lawmakers seemed to agree on. Even then-President Biden was on board, having resurrected Trump’s aborted TikTok ban from his first term and signed it into law. “It feels different now than it did two years ago at the end of the Trump administration, when concerns were first raised,” Carr told me then, in August of 2022. “I think, like a lot of things in the Trump era, people sort of picked sides on the issue based on the fact that it was Trump.” One thing led to another, though, and it looked like Carr was probably…
Share
BitcoinEthereumNews2025/09/18 07:29