UK Spearheads International Effort on Crypto Tax

UK takes the lead on international Crypto Tax effort

The UK-led Crypto-Asset Reporting Framework (CARF) is the OECD's most recent flagship tax transparency standard. It will imply that crypto platforms must begin sharing taxpayer information with tax authorities, which they presently do not, for these agencies to share information to enforce tax compliance. The CARF is planned to be implemented in time for exchanges with other nations to begin in 2027.

Today's milestone follows the 2021 two-pillar global tax agreement, which aims to guarantee that firms pay the correct tax where they operate and cracks down on huge multinational corporations that evade tax through a 15% worldwide minimum rate.

Victoria Atkins, Financial Secretary to the Treasury, stated:

"I am proud that the UK is once again demonstrating global leadership in combating tax evasion, helping to secure the revenue that is critical for the public services that we all rely on."

"Today we are sending out a strong message that we will not allow criminals to use crypto to avoid paying their fair share."

The CARF will expand on the existing mechanism used by tax authorities to communicate information with one another, known as the Common Reporting Standard. Since its beginning in 2014, this has already proven enormously effective in combating offshore tax evasion, with about £100 billion in additional tax income collected from traditional financial assets.

The new framework presented today will be critical in combating the rising degree of tax evasion caused by the fast expansion of the global crypto industry, with some estimates indicating that tax evasion on crypto-asset holdings might range from 55% to 95%.

The United Kingdom, which stands to reclaim hundreds of millions of pounds as a consequence of CARF implementation, leveraged its position as a global pioneer in tax transparency to explore, negotiate, and ratify CARF rules while galvanizing international support.