Forty-eight countries across six continents have committed to a new tax transparency standard starting in 2027 to fight crypto-related tax evasion.
Countries – including Ireland, Austria, France, Germany, Italy, Croatia, Japan, South Korea, the US, and Canada – penned their signatures. Massive players like China, Russia, and India did not. Out of Africa, only South Africa joined.
The Crypto-Asset Reporting Framework (CARF) is the latest tax transparency standard by the Organisation for Economic Co-operation and Development (OECD), per the UK’s announcement.
Therefore, the countries have announced their “intention” to implement the new framework in time to commence exchanges by 2027, saying:
“It will provide for the automatic exchange of information between tax authorities on crypto exchanges for the purpose of combating offshore tax avoidance and evasion.”
Also, they’ve committed to implementing amendments to the Common Reporting Standard (CRS), an existing tax transparency standard for the exchange of financial account information.
The final agreement on the CARF was reached in March this year, following two years of negotiation, the statement said. It was finalized in June.
The joint statement reads,
“To keep pace with the rapid development and growth of the crypto-asset market and to ensure that recent gains in global tax transparency will not be gradually eroded, we welcome the new international standard on automatic exchange of information between tax authorities developed by the OECD – the Crypto-Asset Reporting Framework (CARF).”
It added that the consistent, timely, and widespread CARF implementation will enhance the signatories’ ability to ensure tax compliance.
It will help them clamp down on tax evasion, it said, which reduces public revenues and increases the burden on taxpayers.
Furthermore, the signatory jurisdictions say they “play host to active crypto markets.” Hence, they plan to “work towards swiftly transposing” the CARF into domestic law.
In its statements, Singapore noted that it actively participated in the development of the CARF at the OECD. The Inland Revenue Authority (IRAS) said that the country is already heavily involved in international combat against tax invasion.
Singapore abides by the internationally agreed standards for the Exchange of Information (EOI) for tax transparency. It is also a member of the Global Forum on Transparency and Exchange of Information for Tax purposes (Global Forum). The IRAS will now work with the industry to provide guidance for CARF implementation, it added.
The signatories invited other jurisdictions to:
“Join us with a view to enhancing the global system of automatic information exchange which leaves no hiding places for tax evasion.”
Meanwhile, countries across the world have been increasingly focusing on crypto-related tax regulations. Read more below.