Australia invites public feedback on crypto tax reporting framework

The Australian Treasury is seeking public input on the Crypto Asset Reporting Framework (CARF), developed by the Organisation for Economic Cooperation and Development (OECD).

CARF aims to combat crypto-linked tax evasion by enhancing transparency and ensuring governments can effectively monitor and tax cryptocurrency transactions.

A consultation paper released on November 21 outlines the potential benefits of adopting the OECD framework and invites feedback on its integration into Australian tax law.

The Treasury emphasised that CARF would complement ongoing efforts to improve tax transparency, addressing challenges posed by the rapid growth of cryptocurrency markets.

Under CARF, crypto intermediaries such as exchanges and wallet providers will be required to report specific crypto transactions, including sales and purchases, to tax authorities.

The Australian government anticipates CARF reporting requirements will commence in 2026, with international data exchanges expected to begin by 2027.

According to the Treasury, this timeline provides crypto asset service providers adequate time to update their systems and prepare for compliance.

The Australian Taxation Office (ATO) plans to consult with stakeholders on the specific format for reporting transactions, likely using an XML schema for standardisation.

To implement CARF, Australia will need to amend its tax legislation and adjust existing Common Reporting Standard (CRS) rules to align with the OECD’s model.

The OECD’s CARF is designed to standardise crypto reporting across member countries, enabling tax authorities to access crypto-related data and reduce tax evasion opportunities.

Treasury’s consultation paper explores options for minimising compliance costs and ensuring a smooth transition to the new reporting framework.

Public input will help shape the policy approach, balancing transparency goals with the operational challenges faced by crypto asset service providers.

This initiative reflects the global push to regulate and tax the rapidly evolving crypto market, aligning with international standards to ensure accountability and compliance.

As Australia evaluates the policy and legal adjustments needed for CARF, it joins other OECD countries in tackling the complexities of cryptocurrency tax reporting.

Interested parties are encouraged to share their feedback, as this framework will play a pivotal role in shaping the future of crypto regulation and taxation in Australia.