News Detail: The Global Push for Crypto Tax Transparency
This news marks a massive shift in how digital assets are regulated globally. Governments are moving away from "voluntary reporting" to an automated, mandatory system to track crypto wealth.
1. What is CARF?
The Crypto-Asset Reporting Framework (CARF) was developed by the OECD. It is a global tax transparency framework that allows tax authorities to automatically exchange information about crypto transactions across borders.
2. The 2027 Deadline
A group of 48 countries has issued a joint statement pledging to implement CARF into their national laws by 2027. This means that by 2027, the infrastructure to "capture" and "share" your data will be fully operational.
3. Who is Involved?
The list includes major financial hubs such as:
* Europe: UK, Germany, France, Italy, Luxembourg.
* Americas: USA, Canada, Brazil, Mexico.
* Asia-Pacific: Singapore, Japan, South Korea, Australia.
* Note: While India is not a formal signatory of this specific joint statement yet, it has been a vocal supporter of the framework during G20 summits and is expected to align its domestic laws similarly.
4. Key Data to be Collected
Crypto exchanges and service providers in these 48 countries will be legally required to report:
* Identity Details: Name, address, and Tax Identification Number (TIN) of the user.
* Transaction Types: Exchange of crypto for "fiat" (cash), crypto-to-crypto trades, and high-value retail payments.
* Transfers: Movement of assets to private/unhosted wallets.
5. Why is this happening?
Currently, it is easy for someone to buy crypto in one country and hide the profit in a wallet based in another country. CARF closes this "loophole." If you are a resident of the UK but trade on a Singapore-based exchange, the Singaporean authorities will automatically send your data to the UK tax office.