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23 October 20226 minute read

OECD releases finalized global tax reporting framework for crypto-assets

The Organization for Economic Cooperation and Development (OECD) has published the final Crypto-Asset Reporting Framework (CARF) for the automatic exchange of information between countries on crypto-assets.

The final CARF, released on October 10, 2022, generally narrows the definition of covered assets, provides a final de minimis threshold for retail payment reporting, and provides some guidance on valuation.

In March 2022, the OECD released an initial public consultation document related to CARF which proposed rules to unify crypto-asset tax reporting on a global scale. [1] CARF is designed to standardize the information that various countries gather on crypto-asset transactions and provide a mechanism to share that information with each other.

In response to the initial public consultation document, the OECD revised key provisions of CARF that were widely criticized as being too broad – for example, the definition of covered assets, the treatment of decentralized finance (DeFi) platforms, and who would be required to report.

What assets are covered by CARF?

The final CARF requires reporting for relevant crypto-assets. The OECD defines a “crypto-asset” as “a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions.” While this definition certainly applies to cryptocurrencies like Ether and Bitcoin, it is also intended to reach assets like stable coins, derivatives issues in the form of crypto-assets, crypto-assets that represent financial assets (such as tokenized equity or real estate) and certain NFTs – in effect, CARF covers any crypto-asset that can be used for payment or investment purposes.

There are carveouts for certain assets already within the scope of existing Common Reporting Standards (CRS), those being central bank digital currencies and specified electronic money products. There is a second carveout for crypto-assets that cannot be used for payment of investment purposes, such as closed loop assets (for instance, loyalty rewards program tokens, digital media, or online subscriptions, provided they cannot be transferred on a secondary market).

Generally speaking, the final CARF primarily applies to the following transactions: crypto-asset to fiat currency exchanges, crypto-asset to crypto-asset exchanges, transfers of crypto-assets, and crypto-asset-based retail transactions. However, the final rules include a new de minimis threshold of $50,000 for retail transaction reporting. Additionally, retail reporting is only required where the reporting entity is required to verify a customer under anti-money laundering regulations.

The crypto-asset industry had hoped there would also be an explicit carveout for NFTs. In rejecting this request, the OECD commentary notes that NFTs may qualify as collectables, but that classification does not prevent NFTs from being used as a payment or investment mechanism and as such.

Who must report?

Similar to the proposed guidance, the final CARF provides that any reporting crypto-asset service provider (RCASP) is required to collect information under CARF. An RCASP is any person (entity or individual) that “provides a service effectuating exchange transactions [described above] for or on behalf of customers, including by acting as a counterparty, or as an intermediary, to exchange transactions, or by making available a trading platform.” Under this definition, exchanges, brokers, and dealers of relevant crypto-assets, as well as operators of relevant crypto-asset ATMs, all fall into the definition of an RCASP.

With respect to DeFi, the final rules state that a DeFi exchange or protocol is considered a RCASP if the entity (or individual) “exercises control or sufficient influence over the platform.” This definition of control parallels that contained in the 2012 Financial Action Task Force (FATF) recommendations and other FATF guidance. However, we note that this is not the only standard that may be used to assess whether a DeFi platform exercises influence or control (for example, would a DeFi platform user’s ability to develop and enhance software protocols governing the way transactions are finalized on the platform constitute influence and control).

NFT marketplaces, such as OpenSea, may also generally be considered RCASPs since, as noted in the CARF, “NFTs that are traded on a marketplace can be used for payment or investment purposes and are therefore to be considered” relevant crypto-assets, despite the fact that they may also be collectibles. As such, it seems that NFT marketplaces are likely subject to such reporting.


Under the proposed CARF, tax authorities were given authority to receive actual wallet addresses as part of the information gathering process. In response to extreme industry outcry, the final CARF has omitted this aspect and merely requires that tax authorities be given information regarding the fair market value of the assets and number of units being transferred to other wallets.


The final CARF also provides further guidance on hard-to-value assets. Under the rules, if a hard-to-value asset is exchanged for another crypto-asset that has a value, the RCASP may rely on the second value of new resulting property from the exchange rather than the former hard to value property. In addition, if the RCASP does not maintain an applicable reference value, it may rely on:

  • First, the internal accounting book values the RCASP maintains with respect to the relevant crypto-asset must be used
  • If a book value is not available, a value provided by third-party companies or websites that aggregate current prices of relevant crypto-assets must be used, if the valuation method used by that third party is reasonably expected to provide a reliable indicator of value
  • If neither of the above is available, the most recent valuation of the relevant crypto-asset by the RCASP must be used; and
  • If a value can still not be attributed, a reasonable estimate may be applied as a measure of last resort.

What’s next?

The OECD is still considering an implementation plan that would include the CARF and example multilateral/bilateral competent authority agreements to enable the CARF to automatically exchange information with multiple jurisdictions and accompanying operational guidance on the implementation.

Implementation of the CARF will ultimately be left to each country to implement through local legislation – as such, there is always a risk that some will implement and others may not, which could create complex inconsistencies in information reporting for crypto-assets and those subject to reporting. For example, as we have discussed in prior editions of this newsletter, the US has adopted its own information reporting regime with respect to digital assets, with regulations implementing these rules expected in the near future. This, combined with the fact that the US has not adopted CRS, leads us to believe that the US will not adopt the CARF.

Find out more by contacting either of the authors.