OECD Cryptocurrency Tax Reporting Framework (CARF) Officially Launched, Covering 48 Jurisdictions

The Organisation for Economic Co-operation and Development (OECD) has officially launched its Crypto-Asset Reporting Framework (CARF), with 48 jurisdictions now beginning to collect detailed transaction data from crypto service providers. This move aims to enhance global tax transparency and combat tax evasion and money laundering in the cryptocurrency space. The framework goes into full effect in 2027, with the first data exchanges between participating countries expected in that year.

The UK has taken a leading role in implementing the CARF rules. Starting January 1, 2026, the country began enforcing the new framework, requiring exchanges to collect and report user transaction data and tax residency information to HM Revenue & Customs (HMRC). This is part of a broader global effort to bring crypto assets under the same scrutiny as traditional financial accounts.

Penalties for non-compliance are severe. Crypto platforms that fail to report transactions accurately may face fines of up to £300 per user. For individuals, failing to report gains can result in back taxes, interest charges, and potential legal action. This enforcement marks one of the largest crackdowns on crypto tax evasion.

Why Did This Happen?

The OECD's CARF framework is a response to the growing use of cryptocurrencies and the challenges this poses for tax authorities. Governments are seeking to close the gap in cross-border tax reporting that exists in traditional financial systems. The UK's implementation of CARF is aligned with a global push for transparency, driven by the G20 Finance Ministers since 2021.

The framework mirrors existing banking transparency rules that have been effective in recovering unpaid taxes. The UK, home to an estimated 6 to 7 million crypto users, aims to treat crypto transactions with the same level of scrutiny as bank accounts, ensuring compliance with existing tax laws.

How Will This Affect Crypto Users?

For many retail users, this is the first time their crypto activity will be tracked at the same level as traditional financial accounts. The data collected includes transaction history, wallet activity, and tax details such as National Insurance numbers. This information will be submitted to HMRC by May 31, 2027, and shared with other CARF-participating countries from 2027 onward.

Crypto gains in the UK are still taxed under existing rules, ranging from 10% to 24%, depending on the individual's income and tax category. The new framework does not introduce new taxes but ensures that tax authorities can enforce existing rules more effectively.

What Are Analysts Watching Next?

Analysts are monitoring how crypto platforms adapt to the new reporting requirements. Centralized exchanges like Coinbase and Binance have stated they are upgrading their systems to comply with CARF. However, there is concern about the application of the framework to decentralized finance (DeFi) platforms and non-custodial wallets according to industry analysts.