OECD Develops New Global Reporting Framework for Crypto Assets

New Delhi: The Organization for Economic Co-operation and Development (OECD) has developed a new global tax transparency framework for reporting and sharing information related to crypto assets. The framework called Crypto-Asset Reporting Framework (CARF) was developed after a G20 request that the OECD develop a framework for the automatic exchange of information between countries about such digital assets.

The CARF consists of rules and commentary that set out: i) the scope of crypto-assets to be covered; (ii) the entities and persons subject to data collection and reporting requirements; iii) the transactions subject to reporting, as well as the information to be reported in respect of such transactions; and iv) the due diligence procedures to identify crypto-asset users and controlling persons and to determine the relevant tax jurisdictions for reporting and exchange purposes.

The CARF will be presented to G20 finance ministers and central bank governors for discussion at their next meeting on Wednesday and Thursday in Washington DC, the intergovernmental organization OECD said in a statement on Monday.

The new transparency initiative, co-developed with the G20 countries, comes against the backdrop of rapid adoption of the use of crypto assets for a wide variety of investment and financial applications.

“Unlike traditional financial products, crypto-assets can be transferred and held without going through traditional financial intermediaries, such as banks, and without a central administrator having full visibility into the transactions performed or holdings of crypto-assets,” he said. the. , adding that the crypto market has also spawned new middlemen and service providers, such as crypto asset exchanges and wallet providers — many of which are currently unregulated.

The new crypto asset reporting framework and changes to the Common Reporting Standard will ensure that the tax transparency architecture remains up-to-date and effective, said OECD Secretary General Mathias Cormann.

“The Common Reporting Standard has been very successful in the fight against international tax evasion. By 2021, more than 100 jurisdictions exchanged information on 111 million financial accounts, representing a total assets of EUR 11 trillion,” Cormann said.

Furthermore, the OECD has also proposed to the G20 a series of further amendments to the current Common Reporting Standard, with the aim of modernizing its scope to fully cover digital financial products and improve their functioning, taking into account the experience gained by countries and companies .

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