- HMRC are considering the personal tax implications of decentralised finance activities involving lending and staking following a consultation on potentially changing the tax law in this area.
- In October 2022 the OECD published details of a new cryptoasset reporting framework (CARF) which it developed working with G20 countries. The CARF is designed for the annual automatic exchange of tax information on transactions in cryptoassets based on jurisdictions of tax residence. Changes have also been made to the Common Reporting Standard (CRS) to bring new financial assets, products and intermediaries into scope. In October 2024 the OECD published XML Schemas and User Guides to support transmission of information between tax authorities.
- In November 2023 48 jurisdictions published a joint statement stating that they would introduce the CARF and activate information exchange agreements so that information exchanges can commence by 2027. A number of additional jurisdictions have also made public statements that they intend to sign-up to the CARF.
- The EU incorporated the CARF and CRS changes through DAC8 on 17 October 2023 to require the reporting of information by cryptoasset service providers and operators that provide services to EU residents, irrespective of size, location or regulatory status of the service provider/operator.
- Following consultation, the government has decided to extend the CARF’s reporting requirements to UK users.
- Timing: DAC8 should be transposed by the 27 member states by 31 December 2025 in order to apply the new reporting requirements relating to cryptoassets, e-money and digital currencies as from 1 January 2026. The UK technical consultation on draft regulations for the implementation of the CARF and amendments to CRS closed on 10 January 2025 and the government wants changes to be made in time to ensure that information exchanges take place from 2027.
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