The Organization for Economic Cooperation and Development, more commonly known as the OECD, has released a framework with the goal of assisting tax authorities get more visibility on cryptocurrency transactions as well as the people who are behind them.
OECD on October 10 in a statement said the organisation intended to deliver the Crypto-Asset Reporting Framework, also known as CARF, to a gathering of G20 finance ministers and central bank governors on October 12-13. In light of the growth in the number of unregulated cryptocurrency exchanges and wallet providers, the cryptocurrency tax framework advocated the automated sharing of information on cryptocurrency transactions across jurisdictions on an annual basis.
As per the report OECD believes “the potential of their usage for tax evasion” is increased since crypto transactions do not come within the Common Reporting Standard (CRS), which is used by both the G20 and the OECD. Carve outs will be included in the framework for “assets that cannot be utilised for payment or investment purposes,” as well as for assets that are currently obliged to be reported by the CRS.
The G20 issued a mandate in April 2021 requiring the development of the CARF framework, which mandates the reporting of the kind of cryptocurrency as well as the type of digital asset transaction, namely whether the transaction was conducted via an intermediary or a service provider. The OECD adopted revisions to the CRS in August, one of which included adding digital currencies issued by central banks within the scope of its reporting.
If it were to be accepted, the framework would most certainly make it easier for the 38 countries that are members of the OECD to share information about crypto transactions with one another. These countries include the United States, Japan, South Korea, and a great number of European nations.
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