- HMRC has published guidance on how cryptoassets should be taxed (based on substance rather than terminology).
- HMRC considered responses to a call for evidence on the taxation of decentralised finance activities involving lending and staking and published a new consultation considering a law change to make taxation of individuals, and perhaps corporates, simpler and to better reflect what investors believe to be the economic reality of the transactions they’re entering into.
- In October 2022 the OECD published details of a new cryptoasset reporting framework (CARF) which it developed working with G20 countries. The CARF is designed for the annual automatic exchange of tax information on transactions in cryptoassets based on jurisdictions of tax residence. Changes have also been made to the Common Reporting Standard (CRS) to bring new financial assets, products and intermediaries into scope. In October 2024 the OECD published XML Schemas and User Guides to support transmission of information between tax authorities.
- In November 2023 48 jurisdictions published a joint statement stating that they would introduce the CARF and activate information exchange agreements so that information exchanges can commence by 2027.
- The EU incorporated the CARF and CRS changes through DAC8 on 17 October 2023 to require the reporting of information by cryptoasset service providers and operators that provide services to EU residents, irrespective of size, location or regulatory status of the service provider/operator.
- In October 2024, the government published a summary of responses to the consultation on the implementation of the CARF and amendments to CRS. This includes a decision to extend the CARF’s reporting requirements to UK users. The government will legislate in Finance Bill 2024-25 and has published draft regulations for technical consultation.
- At the Spring Budget 2023, the previous government announced that a change will be made to tax returns for individuals, trusts and estates to require amounts in respect of cryptoassets to be separately identified when the capital gains tax pages to the return are completed.
- Timing: DAC8 should be transposed by the 27 member states by 31 December 2025 in order to apply the new reporting requirements relating to cryptoassets, e-money and digital currencies as from 1 January 2026. The UK technical consultation on draft regulations for the implementation of the CARF and amendments to CRS closes on 10 January 2025 and the government wants changes to be made in time to ensure that information exchanges take place from 2027. In the UK, the changes regarding tax returns will be introduced for the 2024/25 tax year.
Resources (click to open)
- Crypto-Asset Reporting Framework and amended Common Reporting Standard: OECD releases IT format for transmitting information and issues interpretative guidance (OECD, 2 October 2024)
- Draft regulations for Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 and The International Tax Compliance (Amendment) Regulations 2025 (HMRC technical consultations, closes 10 January 2025)
- Consultation: Cryptoasset Reporting Framework, Common Reporting Standard amendments, and seeking views on extension to domestic reporting (HMRC, consultation outcome, closed October 2024)
- Collective engagement to implement the Crypto-Asset Reporting Framework (10 November 2023)
- DAC 8 on crypto assets formally adopted by EU member states (Deloitte tax@hand, October 2023)
- DAC8 Directive to boost cooperation between national taxation authorities (EU Council press release, October 2023)
- Cryptoassets: key points for the taxation of individuals | TaxScape | Deloitte (August 2023)
- HMRC approach to the taxation of cryptoassets | TaxScape | Deloitte (August 2023)
- Consultation: The taxation of decentralised finance involving the lending and staking of cryptoassets (HMRC, consultation closed 22 June 2023)
- Same but different: A comparison of the OECD CARF and the EU DAC8 proposal (Deloitte tax@hand - February 2023)
- Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard (OECD, October 2022)
- Call for evidence: The taxation of decentralised finance involving the lending and staking of cryptoassets (HMRC, call for evidence closed 31 August 2022, response published 27 April 2023)
- Digital Assets - Beyond Bitcoin | TaxScape | Deloitte (March 2022)
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