The Organization for Economic Co-operation and Development (OECD) has developed a new global tax transparency framework for the reporting and exchange of information relating to crypto assets. The framework named Crypto-Asset Reporting Framework (CARF) was developed after a request from the G20 asking the OECD to develop a framework for the automatic exchange of information between countries on these digital assets.
The CARF consists of rules and commentaries that define: i) the scope of crypto-assets to be covered; ii) Entities and individuals subject to data collection and reporting requirements; iii) the transactions subject to report, as well as the information to be reported concerning these transactions; and (iv) due diligence procedures to identify crypto-asset users and controlling persons, and to determine relevant tax jurisdictions for reporting and trading purposes. The CARF will be presented to G20 finance ministers and central bank governors for discussion at their next meeting on Wednesday and Thursday in Washington DC, the intergovernmental organization OECD said in a statement on Monday.
The new transparency initiative, developed in collaboration with G20 countries, comes against the backdrop of the rapid adoption of the use of crypto-assets for a wide range of investment and financial uses. “Unlike traditional financial products, crypto-assets can be transferred and held without the intervention of traditional financial intermediaries, such as banks, and without any central administrator having full visibility into the transactions carried out or crypto-asset holdings,” he said. , adding that the crypto market has also spawned new intermediaries and service providers, such as crypto-asset exchanges and wallet providers, many of which are currently unregulated.
The new crypto asset reporting framework and amendments to the Common Reporting Standard will ensure that the tax transparency architecture remains up-to-date and effective, said OECD Secretary-General Mathias Cormann. “The Common Reporting Standard has been highly effective in combating international tax evasion. In 2021, more than 100 jurisdictions exchanged information on 111 million financial accounts, covering total assets of €11 trillion” , Cormann said.
In addition, the OECD also presented to the G20 a series of additional amendments to the current Common Reporting Standard, with the intention of modernizing its scope to comprehensively cover digital financial products and improving its functioning, taking into account the experience gained by countries and companies. . (ANI)
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