CARF — what it really means for crypto reporting and tax transparency

Crypto is no longer operating in a regulatory grey zone.
With the Crypto-Asset Reporting Framework (CARF) from the OECD, crypto assets are entering the same global tax transparency system that applies to banks and investment accounts. CARF standardises how crypto transaction data is collected and exchanged between tax authorities worldwide.

Under CARF, crypto platforms and service providers must collect user data and transaction information and share it with local tax authorities. In the EU, this obligation is implemented through DAC8, which makes CARF provisions binding from 1 January 2026. 

CARF is a global reporting framework

CARF is designed to ensure tax authorities can access information about crypto-asset transactions for tax compliance and anti-evasion purposes. It is part of the OECD’s automatic exchange of information standards, alongside the Common Reporting Standard (CRS).

CARF covers:

• crypto transactions

• holdings of relevant crypto-assets

• user identification and tax residence

• details of wallets and platforms involved

This applies not only to traditional exchanges but also to other services that effectuate crypto transactions.

DAC8 is CARF in EU law. It requires crypto providers to report the same information and exchange it across EU tax authorities. 

CARF vs CRS: how they work together

CARF and CRS both involve automatic exchange of tax-relevant information. CRS covers traditional financial accounts, while CARF focuses on crypto.

CRS tells tax authorities where accounts exist and links them to tax residence.
CARF adds details about crypto activity — trades, transfers, and economic events — as reported by service providers.

Together they paint a fuller picture of financial infrastructure and movement of value.

What CARF means in practice

CARF’s effect is not instantaneous real-time surveillance. Like CRS, it is based on annual reporting. But once data is exchanged, tax authorities can cross-check it against other records.

For example, an EU tax resident trading crypto through non-EU platforms may suddenly find that what once seemed “not in scope” becomes visible to local authorities once the relevant platforms report under CARF rules. This does not mean new taxes appear; it means existing tax rules can be checked more effectively.

A real example of how this plays out in practice is described here.

CARF shifts crypto activity from being a parallel space into the mainstream transparency framework.

A typical risk scenario

CARF does not automatically trigger audits. What creates exposure is inconsistency:

• tax residency in an EU country

• crypto activity routed through non-EU platforms

• income or gains not clearly linked to residency

• no documented logic explaining economic activity

Once information is exchanged under CARF and matched with other datasets — tax returns, residency records, bank AML/KYC data — authorities may seek explanations if the structure lacks coherence.

FAQ — CARF and crypto reporting

What exactly will be exchanged under CARF?
Crypto platforms will report user identification, tax residence, and details of reportable transactions to local tax authorities, which then exchange this information internationally.

Does CARF create new taxes?
No. CARF does not create new tax liabilities. It provides authorities with more information to enforce existing tax rules.

Which providers must report?
Entities classified as Reporting Crypto-Asset Service Providers (RCASPs), including exchanges, custodial wallets, brokers and similar intermediaries.

Does CARF apply only in the EU?
CARF is a global framework. DAC8 implements it in EU law, but many other jurisdictions are committing to CARF reporting standards.

Will authorities see all my transactions instantly?
No. Like CRS, CARF is based on annual reports. Detailed transaction history becomes relevant if authorities select a case for review after the data exchange.

Why this matters now

From 1 January 2026, DAC8 brings CARF reporting into force in the EU, and information exchange under CARF is expected to begin soon after. National laws must transpose DAC8 by the end of 2025.

These changes close a major transparency gap. Crypto activity is no longer separate from global financial reporting systems. CARF aligns crypto reporting with established standards like CRS to ensure tax compliance can be checked across borders.