Starting from January 1: Over 40 countries change cryptocurrency tax rules - what investors need to know

The new year brings significant changes for everyone involved in digital asset trading. Starting January 1st, the Crypto-Asset Reporting Framework (CARF), an international standard developed by OECD, will come into effect, transforming the way tax oversight is conducted in the cryptocurrency market. The United Kingdom is one of over 40 countries implementing these new requirements.

What changes for exchanges and traders?

Under the new CARF framework, trading platforms are now required to maintain detailed records of all transactions made by their users. This particularly applies to individuals with tax residence in the United Kingdom. Exchanges will be obliged to collect comprehensive data on capital flows and then transmit this information to the relevant tax authorities.

Requirements for the United Kingdom

The British Treasury (HM Revenue & Customs - HMRC) will receive reports containing information about user transactions and their tax status. This practically means the end of anonymity on traditional exchanges. Every trader must accept that their financial activity will be documented and potentially subject to review by tax authorities.

Global tax harmonization

This is not an isolated change. Over 40 countries are simultaneously implementing identical standards, meaning investors from different parts of the world will be subject to the same regulations. OECD has worked on this solution to prevent tax evasion and to enforce transparency in the digital asset market.

What does this mean in practice?

For users of exchanges, it means they need to prepare for a much higher level of transparency regarding their activities. Every transaction, every transfer — everything will be recorded and reported. Individuals who previously relied on the absence of an audit trail will need to change their approach to reporting income from cryptocurrencies.

The introduction of the CARF standard marks a groundbreaking moment for the entire industry. Although it may be inconvenient for some, this change aims to professionalize the market and ensure tax fairness worldwide.