- UK leads first-of-its-kind global commitment to combat offshore crypto tax evasion
- Minister Victoria Atkins praises international cooperation to close the gap in the global tax system and potentially recover hundreds of millions of pounds in lost revenue.
- The landmark deal follows the UK's leadership in the landmark G20 and OECD global tax deal agreed in 2021, which will clamp down on corporate tax avoidance and ensure the right tax is paid in the right place.
The Crypto Asset Reporting Framework (CARF), pioneered by the United Kingdom, is the OECD's latest flagship tax transparency standard. It will mean that crypto platforms will have to start sharing taxpayer information with tax authorities, something they currently do not do, ensuring that these authorities can exchange information to enforce tax compliance. The CARF is expected to enter into force in time for exchanges with other countries to begin from 2027.
Today's milestone follows the 2021 twin-pillar global tax deal, which aims to ensure the companies where they operate pay the correct tax and crack down on large multinational companies that evade taxes through a 15% global minimum rate. .
Treasury Finance Secretary Victoria Atkins said:
โI am proud that the UK is once again demonstrating leadership in the fight against global tax evasion, helping to secure the revenues that are essential for the public services we all use.
"Today we are sending a strong message that we will not allow criminals to use cryptocurrencies to avoid paying their fair share."
The CARF will build on the existing system that tax authorities use to share information with each other, called the Common Reporting Standard. This has already had great success in combating offshore tax evasion, with almost ยฃ100 billion in additional tax revenue recovered from traditional financial assets since its inception in 2014.
The new framework announced today will be essential to counter the rising level of tax evasion caused by the rapid growth of the global cryptocurrency market, with some estimates suggesting that tax non-compliance on crypto asset holdings could be as high as 55%. at 95%.
The UK, which will potentially recover hundreds of millions of pounds as a result of CARF implementation, used its position as a global leader in tax transparency to determine, negotiate and finalize CARF provisions, while galvanizing international support.
More information
- Read the OECD Crypto Asset Reporting Framework (CARF).
- The 'Global Forum on Transparency and Exchange of Information for Tax Purposes', a 168-country forum convened under the auspices of the OECD, was mandated by the G20 to oversee the widespread implementation of the CARF. CARF has also been endorsed by the G7.
- The joint statement aims to reinforce this mandate and support the Global Forum in its work by demonstrating early momentum.
