OECD countries adopt global framework to tax crypto profits

The governments of 48 countries, including Germany, support the OECD’s proposal to implement a global tax standard for crypto assets by 2027: the “Crypto-Asset Reporting Framework” (CARF).

When it comes to taxes, all governments pull together, and suddenly things can happen quickly. The Crypto-Asset Reporting Framework (CARF) was only proposed about a year ago and has since been developed by the Organization for Economic Co-operation and Development (OECD). It was approved by 48 countries last week and will come into force in 2026.

This framework is intended to standardize global tax collection on crypto trading profits and close loopholes. OECD Secretary General Mathias Cormann called the decision “another important milestone towards a broad and coordinated approach to combating tax avoidance.”

Many governments fear that cryptocurrencies can be used to evade taxes because they can be transferred pseudonymously and without an intermediary. The International Monetary Fund (IMF) warned in August that crypto could cause “significant tax problems.” He estimates that a 20 percent tax on crypto profits would have brought in $100 billion globally in the boom year of 2021. In the US, some crypto-critical senators, including Elizabeth Warren and Bernie Sanders, assume that lax taxation of crypto is costing the treasury $50 billion.

According to the OECD, a “broad, consistent and timely implementation” of CARF should absorb this tax source. G20 finance ministers proposed CARF in October 2022 at a global tax transparency forum attended by 168 countries. There appears to be a global consensus to tax crypto profits more consistently.

The plans for CARF are already relatively concrete: It should oblige crypto service providers to collect information about their users, including the tax location and the tax identification number. If possible, the service providers must check this information for accuracy and transmit it to the responsible tax offices, which exchange it with each other.

The crypto service providers have to report several types of transactions. This not only includes switching between fiat and crypto and from crypto to crypto, but also the transfer of cryptocurrencies, both to your own wallets and as payment to the dealer or service provider. Tax-relevant profits can also be realized here. After all, the addresses of your own wallets were recorded.

The 48 countries include almost all of the relevant Western industrial nations, although not China, Russia and India. Governments promise to implement CARF into national laws by 2027 and encourage exchanges to implement it. The EU is still going beyond this timetable. The rules are to be implemented here from January 2026 through Union-wide legislation, which will be appended to the “Markets of Cryptp-Assets Regulation (MiCA)”.

Decentralized exchanges and other DeFIs do not in themselves fall under the rules. However, CARF should apply if there are people or companies behind the DeFi that could comply with the rules. This is in line with the plans of the US tax service IRS, which wants to expand the definition of a broker required to report to include anyone who is able to modify a platform in such a way that the necessary customer data becomes available – including the developers of Smart Contracts for DeFi.