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Update: OECD Crypto-Asset Reporting Framework

On 10 October 2022, the Organisation for Economic Co-operation and Development (“OECD”) published the final guidance on the Crypto-Asset Reporting Framework (“CARF”) and a set of amendments to the Common Reporting Standard (“CRS”). Taken together, the final CARF guidance and the amendments to the CRS set out a global tax transparency compliance framework with model rules for the automatic reporting and exchange of taxpayer information between countries relating to financial accounts and crypto-assets.  


As reported here in BrassTax in April 2022, the OECD’s public consultation on CARF in the Spring of 2022 acknowledged that the rapid adoption of crypto-assets for a range of financial and investment activities has posed significant challenges for national tax administrations in recent years. In contrast to traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries. There is no central global organisation or regulator that commands full visibility on the transactions carried out by, or the crypto-asset holdings of, individuals, companies or funds. It is unsurprising, therefore, that national and global tax administrators have concerns that crypto-assets may be exploited to undermine existing international tax transparency initiatives, such as the CRS.

Framework for crypto-asset reporting

The OECD’s publication of CARF serves as a stand-alone framework for the automatic exchange of information on crypto-assets. The OECD’s intention is for CARF to ensure transparency with respect to crypto-asset transactions through automatically exchanging transactional information with the jurisdictions of residence of taxpayers on an annual basis, in a standardised manner similar to the CRS. In this regard, CARF complements the existing tax transparency provisions of the CRS. The OECD’s final guidance provides details on how CARF is intended to be applied, and how CARF interacts with the CRS.


A crypto-asset is defined in CARF in broad terms as “a digital representation of value that relies on a cryptographically secured distribution ledger or similar technology to validate and secure transactions.” The definition is deliberately broad.  It applies to cryptocurrencies like Bitcoin, Ether, Binance Coin and XRP but is also intended to encompass assets such as stable coins, derivatives issued in the form of crypto-assets, crypto-assets that represent financial assets (such as tokenized equity or real estate) and some NFTs. The OECD’s intention is, in effect, for CARF to cover any crypto-asset that can be used for payment or investment purposes. In order to future-proof CARF as far as possible, the scope of crypto-assets covered includes asset classes relying on similar technology that may emerge in the future.  

Exclusions from CARF

One of the criticisms of CARF guidance prepared by the OECD for public consultation in the spring of 2022 was that the exclusions from reporting were too narrow. The OECD has responded by broadening and clarifying certain carve-outs from CARF. Exclusions will apply for assets that cannot be used for payment or investment purposes, crypto-assets that can only be exchanged or redeemed within a limited fixed network for specified goods and services (such as air miles), closed-loop crypto-assets and for assets already fully covered by the CRS, including central bank digital currencies and specified electronic money products. The rationale behind the exclusions from CARF is that such transactions are not considered by the OECD to pose a systemic risk to tax administrations. 

An important relaxation in CARF guidance applies to an individual or entity that makes available a trading or decentralized finance (“DeFi”) platform. Such a person is subject to CARF reporting if the individual or entity “exercises control or sufficient influence over the platform.” The scope of control or sufficient influence is now framed more narrowly than was previously proposed in the OECD draft CARF guidance in the spring of 2022, in order to better align with the recommendations of the Financial Action Task Force (“FATF”) regarding anti-money laundering procedures. 

What is the scope of transactions under CARF?

The following three types of transactions are reportable transactions under CARF:

  • exchanges between crypto-assets and fiat currencies;
  • exchanges between one or more forms of crypto-assets; and
  • transfers of crypto-assets (including retail payment transactions subject to a de minimis threshold of $50,000).

Transactions will be reported on an aggregate basis by type of crypto-asset. In order to enhance the usability of the data for tax administrations, the reporting on exchange transactions is to be distinguished between crypto-asset-to-crypto-asset and crypto-asset-to-fiat currency transactions. Reporting obligations will also categorise transfers by transfer type (e.g., airdrops, income derived from staking or a loan) in circumstances where the reporting provider has such knowledge.


The obligation to report under CARF will apply to any entity or individual (termed a “Reporting Crypto-Asset Service Provider,” or “RCASP”) that “provides a service effectuating exchange transactions” in crypto-assets for or on behalf of customers with a relevant connection to the jurisdiction implementing CARF. The reporting obligation will cover not only crypto-exchanges, but also other intermediaries and other service providers providing exchange services. CARF reporting obligations will therefore encompass operators of crypto-ATMs, crypto-asset-accepting merchants, electronic-wallet services, and brokers and dealers of crypto-assets.    

CARF provides for the collection and exchange of tax-relevant information from RCASPs between tax administrations, with respect to persons engaging in certain transactions in crypto-assets. Annual reporting will be required of the aggregate values of the transfers and exchanges of crypto-assets within the scope of CARF.  

Proposed amendments to the CRS

In addition, the OECD has refined the final guidance on the amendments to the CRS, with the aim of further improving the operation of the CRS to cover various digital financial products, including electronic money products and Central Bank digital currencies. The guidance takes into account representations from implementing countries and reporting financial institutions, expanding definitions and improving due diligence frameworks. The key amendment from the draft guidance published in the Spring of 2022 ensures that indirect investments in crypto-assets through derivatives and investment vehicles are covered by reporting under CRS, and so avoid duplicative reporting under CARF.    

What next for CARF?

The OECD’s intention is to progress the legal and operational instruments that will be required to facilitate the international exchange of information collected under CARF. This is likely to include a framework of bilateral or multilateral competent authority agreements or arrangements for the automatic exchange of information collected under CARF. The OECD intended that these arrangements include coordinated timing for starting exchanges under CARF to avoid overlapping rules and the potential for duplicate reporting. 

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