OECD CARF refers to the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework, a proposed international standard for the automatic exchange of information concerning crypto-asset transactions. Its core objective is to enhance tax transparency and effectively combat tax evasion within the digital asset sector globally.
Mechanism
The framework mandates that crypto-asset service providers (CASPs) collect and report specific information regarding relevant crypto-asset transactions and holdings of their customers to their respective local tax authorities. These national authorities then automatically exchange this data with other jurisdictions where the customers are identified as tax residents.
Methodology
Implementation requires CASPs to establish robust data collection, validation, and reporting systems capable of identifying reportable persons and transactions, accurately classifying various crypto-assets, and submitting the requisite data in a standardized XML format. This framework extends existing common reporting standards to address the unique characteristics and pseudonymous nature inherent in crypto assets.
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