The Organisation for
Economic Co-operation and Development on Monday filed a framework to increase
international transparency in crypto to the G20. This draft has a set of rules
that aim to rid the crypto sector of potential tax evasion exploitation risks.
G20 is a group of developed
and developing nations which accounts for 85% of global GDP, 78% of global
trade, and two-thirds of the global population. Twenty participating member
countries make up the G20, including China, India, South Korea, Brazil, the US,
the United Kingdom, and the European Union, to name a few. Back in April 2021,
the G20 directed the OECD for developing a method for automating cryptocurrency
tax reporting between nations.
Finance Ministers and
Central Bank Governors of the G20 nations, that form the internal Crypto-Asset
Reporting Framework (CARF), will review the 100-page draft – along with
suggested amendments to the groups Common Reporting Standard (CRS) at their
upcoming meeting, scheduled for this Wednesday and Thursday in Washington DC.
The OECD first filed the
CARF in August, a report that the group calls a “transparency initiative” for
crypto. In addition, it defines “crypto assets” and Non-Fungible Tokens (NFTs),
offers a plan for automatic international crypto tax reporting, and includes
provisions for cryptocurrency derivatives trading.
In its statement, the OECD
said cryptocurrencies are not currently covered by the CRS, which was designed
to prevent international tax evasion. It argued that because crypto is not
covered under the current standard, there is a “likelihood of their use for tax
evasion while undermining the progress made in tax transparency through the
adoption of the CRS.”
The proposed amendments to
the CRS also include the addition and definition of Central Bank Digital
World leaders are
recognizing that crypto is a trillion-dollar industry and that some illegal
traders may exploit crypto’s permissionless and sometimes pseudonymous nature
to evade sanctions, taxes, or engage in other illegal activities.
Over the next months, the
OECD will be taking forward work in the legal and operational instruments to
facilitate the international exchange
of information collected on the basis of the CARF.