OECD releases finalized global tax reporting framework for crypto assetstest subtitle
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.
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.