Crypto Tax Reporting Requirements Set to Begin in UK and Europe

Cryptocurrency users and platforms in 48 jurisdictions will reportedly begin to be impacted by the Crypto-Asset Reporting Framework (CARF) on Jan. 1, 2026.

CARF requires platforms to gather more detailed customer information, verify tax residency and report users’ balances and transactions each year to their domestic tax authorities, Cointelegraph reported Tuesday (Dec. 30).

Tax authorities will then share that data across borders with peers with whom they have information-exchange agreements, according to the report.

The first wave of jurisdictions participating in CARF include the United Kingdom and the European Union, per the report. CARF was created by the Organization for Economic Cooperation and Development (OECD).

Experts interviewed by Cointelegraph said crypto users affected by CARF are likely to face tougher onboarding questions, more frequent account reviews and a greater risk of audits.

When releasing data exchange formats for CARF and the Global Minimum Tax (GMT) in July, the OECD said in a press release that these initiatives are “part of ongoing efforts to enhance tax transparency and improve international tax compliance.”

CARF was created in response to the growth of the crypto-asset market and concerns that the technology could erode global tax transparency, according to the OECD website.

The G20 ordered the OECD to develop a framework for exchanging information relevant to taxes on crypto assets in April 2021, and the OECD approved CARF in August 2022, per the site.

It was reported in September 2023 that the heads of the G20 nations were calling for rapid adoption of global cryptocurrency rules that would allow for the exchange of information between these countries.

The United States is considering implementing CARF. It was reported in November that the White House had begun reviewing a Treasury Department proposal that would implement CARF, enabling the Internal Revenue Service (IRS) to obtain data on U.S. taxpayers’ offshore crypto accounts.

If approved, the rule would authorize the IRS to access information on cryptocurrency accounts held by Americans through foreign exchanges or digital asset service providers, giving the agency a clear view into cross-border holdings and potential undeclared tax liabilities. Administration officials have endorsed the policy.