Key Insights:
- Crypto investors across 48 countries are going to face tighter crypto tax scrutiny as governments move to track crypto wallet transactions.
- More jurisdictions that plan to start exchanging data under CARF in 2027 have already enacted the necessary laws.
- UK-based firm The Bitcoin & Crypto Accountant stated that the framework does not introduce new tax obligations.
Crypto investors in 48 countries will soon face tighter crypto tax scrutiny as governments move to track crypto wallet transactions. Data collection is set to begin this year, well ahead of the formal launch of the Crypto-Asset Reporting Framework.
The framework, developed by the OECD, is designed to improve global tax transparency in the crypto sector. While CARF officially takes effect in 2027, the groundwork is already being laid.
As of January 1, crypto service providers in participating jurisdictions are required to begin collecting transaction data. This includes centralized exchanges, selected decentralized platforms, crypto ATMs, as well as brokers and dealers.
Before the new reporting rules start, tax authorities will already have a clearer view of crypto activity. This is part of the government’s push to make the system more transparent and clamp down on tax evasion and money laundering.
Countries Signal Readiness to Begin Crypto Tax Data Collection
In an November update, the OECD stated that momentum is building behind the framework. More jurisdictions that plan to start exchanging data under CARF in 2027 have already enacted the necessary laws.
Others, according to the update, are in the final stages of enforcing legislation. It will require crypto service providers to collect CARF-related information. As a result, the transition toward full reporting is already well underway.
At its core, CARF aims to help tax authorities ensure that taxpayers pay what they owe, regardless of where their crypto transactions take place. The framework is designed to close loopholes in cross-border crypto trading.
It is worth noting that the industry has been demanding stronger crypto oversight. The G20 finance ministers pushed for action in 2021, and the OECD finalized the key rules by the end of 2022.
The rollout will happen in stages. The first group of 48 countries will begin recording crypto transactions in 2026, with data exchanges starting in 2027.
A second group of 27 countries will follow later, comprising Australia, Canada, Mexico, Hong Kong, and Switzerland, among others. These countries have until January 1, 2027, to start collecting the required data.
Earlier this week, local authorities announced their desire for public feedback on implementing CARF and proposed changes to tax reporting rules. Officials stated that the move is part of broader efforts to combat cross-border tax evasion.
For now, CARF data is intended strictly for tax use. Even so, crypto tax software firm TaxBit said in November that the scope of the information could expand over time.
The firm noted it may eventually offer deep visibility into crypto ownership and identity. This could make it easier for authorities to trace anonymous holdings, support investigations, and connect digital assets to criminal activity.
Retail Users Brace for More Crypto Tax Audits
Retail users, meanwhile, are likely to feel the impact through tougher audits, not new taxes. UK-based firm The Bitcoin & Crypto Accountant said the framework does not introduce fresh tax obligations. Instead, it provides authorities with the tools to enforce existing rules.
From 2026, the firm explained, His Majesty’s Revenue and Customs will begin receiving standardized, machine-readable data straight from crypto exchanges. This will include information from overseas platforms. Thus, it will be far easier for the tax authority to spot gaps between what investors report and what exchanges record.