New regime for the international exchange of information on crypto-assets transactions

Countries face many challenges in relation to cryptoassets. In addition to tax and money laundering issues, they include aspects such as adapting civil, commercial, corporate legislation, personal data protection, among others, to the new business models involving cryptoassets.

In order to know about these operations, many jurisdictions have already established information regimes, where virtual asset service providers (VASPs) are obliged to report operations both to anti-money laundering and terrorist financing agencies, and to Tax Administrations (TAs).

However, currently the big limitation for states is that they only have the power to require subjects residing in their jurisdictions to report operations with cryptoassets.

That is, they do not have the power to regulate the information regimes that oblige non-resident VASPs to report such operations.

In short, the States do not currently have information on transactions conducted through VASPs located abroad, since these are not required to share information with central banks, tax authorities or other public bodies.

In recent years, people have rapidly adopted the use of cryptoassets for a variety of financial and investment activities.

As the OECD highlights, unlike traditional financial products, cryptoassets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having complete visibility of the transactions made or holdings of cryptoassets.

The crypto market has also given rise to new intermediaries and service providers, such as crypto asset exchanges and wallet providers, many of which are currently unregulated.

These developments mean that crypto assets and related transactions are not comprehensively covered by the OECD/G20 Common Reporting Standard (CRS), which increases the likelihood of their use for tax evasion and undermines the progress achieved in tax transparency through the adoption of the CRS (Common Reporting Standard).

Therefore, cryptoassets could be exploited to undermine existing international tax transparency initiatives.


On 22/03/2022, the OECD published a public consultation document[1] on a new global tax transparency framework to enable reporting and information exchange with respect to crypto assets (CARF, Crypto Asset Reporting Framework), as well as the proposed amendments to the CRS for the automatic exchange of information on financial accounts between countries.

The CRS has been operating since 2017 and has been successful in the fight against international tax evasion. In 2021, more than 100 jurisdictions exchanged information on 111 million financial accounts, covering a total of assets of 11 trillion euros.

The CRS urges jurisdictions to obtain information about their financial institutions and to automatically exchange this information annually with other jurisdictions.

It defines the type of financial information that should be exchanged, the financial institutions called upon to transmit this information, the different types of accounts and the taxpayers involved, as well as the reasonable common diligence procedures that financial institutions must follow.

The purpose of the consultation published on 22 March was to inform policy makers’ decisions on the possible adoption of such a framework and its related design components.

The CARF is a new framework that provides for the collection and exchange of tax-relevant information between tax administrations, regarding individuals who conduct certain transactions in cryptoassets.

The CARF consists of rules and comments that can be transposed into national legislation to collect information from reporting cryptoasset service providers with a relevant nexus with the jurisdiction implementing the CARF.

These rules and comments have been designed around four fundamental elements:

  • the scope of the crypto assets to be covered;
  • the entities and individuals subject to data collection and reporting requirements;
  • the transactions subject to reporting, as well as the information to be reported with respect to such transactions; and
  • due diligence procedures to identify crypto asset users and persons exercising control and to determine the relevant tax jurisdictions for reporting and exchange.

It covers crypto assets that can be held and transferred in a decentralized manner, without the intervention of traditional financial intermediaries, as well as asset classes that rely on similar technology that may emerge in the future.

The proposed definition of cryptoassets focuses on the use of cryptographically protected distributed ledger technology (DLTs), as this is a distinctive factor underpinning the creation, holding and transferability of cryptoassets.

The definition also includes a reference to “similar technology” to ensure that it can include new asset classes that arise in the future and that operate in a functionally similar way to cryptoassets.

Therefore, the definition of Cryptoassets is aimed at those assets that can be held and transferred in a decentralized manner, without the intervention of traditional financial intermediaries, including stable coins, derivatives issued in the form of Cryptoassets and certain non-fungible tokens (NFTs).

Excluded from the definition are central bank digital currencies (CBDCs), which function in a similar way to money held in a traditional bank account and, therefore, the reports of them will be included within the scope of the CRS.

The definition of cryptoassets is aimed at ensuring that all assets covered by the new tax reporting framework are also within the scope of the FATF Recommendations, which ensures that the due diligence requirements of intermediaries can be based on existing AML/KYC obligations.

The following three Relevant Transaction types will be reportable under the new framework:

  • Exchanges between cryptoassets and Fiat Currencies;
  • Exchanges between one or more forms of cryptoassets;
  • Transfers (including Reportable Retail Payment Transactions) of Relevant Crypto-Assets.

Transactions will be reported in aggregate form by relevant cryptoasset type and will distinguish incoming and outgoing transactions.

Persons and entities that, as a company, provide services to exchange crypto assets for other crypto assets, or for fiat currencies, must apply due diligence procedures to identify their customers.

Along with the Cryptoasset Reporting Framework (CARF), the OECD has also developed proposals as part of the first comprehensive review of the CRS, with the aim of further improving the functioning of the CRS, based on the experience gained by governments and companies over the years, the last seven years since adoption.

The proposal expands the scope of the CRS to cover the electronic money products and Digital Currencies of the Central Bank.

In light of the development of the CARF, the proposals also include changes to cover indirect investments in cryptoassets through Investment Entities and derivatives.

At the same time, the proposal contains new provisions to ensure efficient interaction between the CRS and the CARF, in particular to limit cases of duplicate reports.

The OECD has invited all interested parties to submit their comments on the CARF.

After receiving the comments and various meetings, on 10/10/2022 the OECD delivered a new document on the CARF[2], which will be presented to the Finance Ministers and Central Bank Governors of the G20 for discussion at their next meeting on October 12-13.

In this presentation, it was said that the CARF will ensure transparency regarding crypto asset transactions, by automatically exchanging such information with the taxpayers’ jurisdictions of residence annually, in a standardized manner similar to the CRS.

The CARF will target any digital representation of value that relies on a cryptographically secured distributed ledger or similar technology to validate and secure transactions.

Carve-outs are provided for assets that cannot be used for payment or investment purposes and for assets that are already fully covered by the CRS.

The CARF contains model rules that can be transposed into national legislation and comments to help administrations with their implementation.

The OECD has also presented to the G20 a set of additional amendments to the CRS, aimed at modernizing its scope to comprehensively cover digital financial products and improve their operation, considering the experience gained by countries and companies.

Over the coming months, the OECD will advance work on legal and operational instruments to facilitate the international exchange of information collected on the basis of CARF and to ensure its effective and widespread implementation, including the timing for starting exchanges under CARF.


I consider it is a particularly good initiative to implement an international exchange regime for transactions involving cryptoassets, similar to the CRS, which could start with cryptocurrencies in a first stage.

If this fails to happen, we will continue to see a proliferation of information regimes in different countries, which will also create complexity for VASPs and taxpayers who conduct operations in different countries, increasing their tax compliance costs.

At the same time, it would be important for each country to have a clear orientation and an applicable legislative framework, where guidance is provided on how cryptocurrencies fit into the existing tax framework, that is, a guide that is comprehensive and addresses the main taxable events and forms of income associated with them.

We know that the tokenized economy presents multiple variants and ways of conducting operations, which is why a very in-depth analysis of each of them is convenient, but it is essential to reach a consensus basic issues of their legal and fiscal treatment.

Faced with global developments such as those we are experiencing, the path of cooperation, collaboration and multilateralism between states is more appropriate than taking unilateral measures.

I say this both from the perspective of legislating to regulate and promote the development and digital transformation of countries, and with regard to the fight against tax fraud, money laundering, terrorism and other crimes.

I am convinced that today, more than ever, we must continue to make progress in international cooperation and multilateralism and in public-private partnerships involving academic and expert centers.



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