Crypto Firms Face a Major Compliance Deadline in 2026

This framework is designed to mirror the tax transparency standards already in place for traditional financial institutions under the Common Reporting Standard (CRS). In the European Union, the recently adopted Eighth Directive on Administrative Cooperation, or DAC8, makes CARF mandatory for all 27 member states, aligning the bloc with the global implementation schedule.

Under CARF, CASPs must implement due diligence procedures to identify and verify their users, including collecting tax residency information and Taxpayer Identification Numbers (TINs). The framework mandates the annual reporting of specific transaction types. These include exchanges between crypto-assets and fiat currencies, exchanges between different crypto-assets, and transfers of crypto-assets, including retail payment transactions. The goal is to provide tax authorities with greater visibility into crypto-related activities to ensure tax compliance. The framework covers a broad range of digital assets, including stablecoins, derivatives issued in the form of a crypto-asset, and certain non-fungible tokens (NFTs).

The primary driver behind CARF is the effort by global governments to combat tax evasion. In a statement, the OECD noted the framework was developed in response to the rapid growth of the crypto-asset market and the risk that crypto could be used to undermine existing international tax transparency initiatives. By establishing a uniform method for reporting and exchanging information, the G20 and OECD aim to ensure that recent gains in global tax transparency are not eroded by the decentralized and borderless nature of the crypto market. The initiative seeks to create a level playing field for both traditional and digital financial assets from a tax perspective.

While the framework and timeline are set, the specific penalties for non-compliance by crypto-asset service providers have not been standardized globally. Penalties will be determined by the individual laws passed within each of the 48 participating jurisdictions. Furthermore, while the United States has been involved in the OECD discussions, its timeline for activating CARF reporting and data exchange is planned for 2029 and remains subject to final IRS rulemaking and potential congressional review.

CASPs operating in the initial wave of adopting countries must ensure their systems and processes are updated to meet the new data collection and reporting requirements by the January 1, 2026, deadline. Following the first data exchange in 2027, additional major economies such as Australia, Canada, Japan, and Switzerland are scheduled to begin exchanging information in 2028. This phased rollout is expected to expand the global reach of the tax transparency standard over the next several years.

Crypto-asset service providers should consult the official CARF documentation and their local jurisdiction’s implementing legislation to understand their specific obligations. Users of crypto platforms in the affected countries should anticipate requests from their service providers to supply tax identification information. It is advisable for all market participants to review their record-keeping practices to prepare for the increased tax reporting requirements.