47 countries have pledged to authorize a Crypto-Asset Reporting Framework by 2027.

Just under 50 national governments have made a joint commitment to “rapidly transpose” into their domestic legislation the Crypto-Asset Reporting Framework (CARF), a new international standard on the automatic exchange of information between tax authorities. The statement was published on November 10.

The Organization for Economic Co-operation and Development (OECD) published CARF in 2022. The CARF framework, developed from the G20's April 2021 mandate, requires reporting on the type of cryptocurrency and digital asset transaction – through an intermediary or service provider.

The drafters of the statement intend to activate exchange agreements so that data exchange can begin in 2027. According to the text:

“Broad, consistent and timely implementation of CARF will improve our ability to ensure tax compliance and reduce tax evasion, which reduces public revenue and increases the burden on taxpayers.”

The list of countries that have pledged includes all 38 OECD member states and some traditional financial havens such as the UK's overseas Cayman Islands and Gibraltar. However, a Europe-centric market will miss out on important markets such as China and Hong Kong, the United Arab Emirates, Russia and Turkey. Also, there is not a single African country and only two Latin American ones – Chile and Brazil.

Related: How to manage crypto losses on tax returns in the US, UK and Canada

CARF is not the only tax information exchange protocol being implemented globally to handle crypto income. In October, the Eighth Directive on Administrative Cooperation (DAC8) – the cryptocurrency tax reporting regulation – was formally adopted by the EU Council. DAC8 is intended to empower tax collectors to monitor and assess every cryptocurrency transaction carried out by individuals or entities in any other EU member state.

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