Cryptocurrency Meets Taxation: OECD Sets the Stage for a Party of Compliance
The Organization for Economic Cooperation and Development (OECD) have launched a snazzy new tax standard just for cryptocurrencies. They’ve even jazzed up the existing common reporting standard with some fancy amendments.
OECD is all about creating guidelines for important stuff like climate change, education, and jobs. While these guidelines aren’t compulsory, they’re like hip suggestions for regulators on how to handle things both domestically and globally.
Now, there was already a system for countries to share tax info, but the Crypto-Asset Reporting Framework (CARF) is here to specifically tackle crypto tax shenanigans.
CARF aims to squash sneaky evasion schemes that folks might try to pull off using these newfangled technologies.
But wait, there’s more! The updated rules also give a facelift to the Common Reporting Standard (CRS), which keeps an eye on financial accounts held abroad to promote tax transparency. It’s been strutting its stuff since 2014.
Mathias Cormann, the bigwig at OECD, couldn’t help but tweet about their fresh international tax transparency standards, aimed at tackling tax evasion in this digitalized and globalized economy. Cue the confetti!
Let’s dive into this tax framework extravaganza! It’s a two-part special: Part One starts with crypto and acknowledges how it’s shaking things up and affecting tax revenue worldwide.
CARF comes with three rad components: rules for collecting the necessary tax info (the what and who of crypto transactions), a snazzy new authority to enforce those rules, and an electronic format (XML) for authorities to swap info like they’re trading crypto-themed stickers.
Now, onto Part Two, where they’ve spiced up the CRS. They’ve even added a section about Central Bank Digital Currencies (CBDCs) and this cool thing called “Specified Electronic Money Product” (fancy talk for digital representations of regular money).
The OECD is on top of its game when it comes to taxing entities and individuals dabbling in crypto. They’ve got their sights on wallets, exchanges, distributed ledger technology (that’s blockchain, folks), and even derivatives based on crypto assets. They’re making sure no one escapes their tax radar.
Clever Robot News Desk 13th June 2023
