CARF under the Christmas tree: EU tax authorities to start tracking crypto transactions - ForkLog: cryptocurrencies, AI, singularity, future

# CARF under the Christmas tree: EU tax authorities to start tracking crypto transactions

Starting January 1, 2026, the European Union will implement the DAC8 directive, introducing the Crypto-Asset Reporting Framework (CARF). Crypto exchanges, brokers, and custodial services will begin providing user transaction data to tax authorities.

As of December 4, only 75 jurisdictions have committed to adopting the standard, according to a report from the Organisation for Economic Co-operation and Development (OECD).

What is CARF

CARF is a reporting standard developed by the OECD at the initiative of the G20. It extends the existing Common Reporting Standard (CRS) of automatic information exchange to the crypto sector.

CARF requires crypto exchanges, brokers, and custodial wallets to report user transactions, including crypto-to-fiat exchanges, crypto-to-crypto deals, and transfers. This information will be automatically sent to the tax authorities of the countries where the clients are residents.

“CARF is a logical continuation of the fight against tax evasion. Previously, tax authorities could track overseas bank accounts through CRS; now, a similar mechanism is being applied to cryptocurrencies. For compliant users, nothing changes, but the era of ‘gray zones’ in the crypto industry is coming to an end,” commented Max Gnatyshin, Head of Operations for Toobit in the CIS.

Who is affected

CARF applies to Reporting Crypto-Asset Service Providers—legal entities and individuals offering crypto-asset exchange services. These include:

• centralized exchanges;
• crypto brokers;
• custodial wallets;
• trading platform operators;
• certain DeFi operators if they exercise control over the protocol.

Providers are required to collect information about clients’ tax residency and report transaction data to the relevant authorities in their jurisdiction. The information is then automatically forwarded to the countries where users are residents.

Implementation timeline

Timelines vary by region. In the EU, crypto exchanges will begin collecting information on January 1, 2026, with the first data exchange between tax authorities scheduled for 2027.

Of the 75 jurisdictions committed to CARF, 53 have already signed the multilateral CARF MCAA agreement, providing the legal framework for data exchange.

Singapore and several Asia-Pacific countries have taken a more cautious approach: implementation is postponed until 2027, with the first exchange in 2028. This gives local regulators extra time to adapt.

How it works alongside CRS 2.0

Alongside CARF, the OECD updated the CRS to version 2.0. The two standards complement each other:

• CRS 2.0 covers financial accounts, including e-money, central bank digital currencies (CBDC), and access to crypto-assets via derivatives or investment funds;
• CARF focuses directly on individual crypto transactions.

The standards include provisions to prevent double reporting. If an asset falls under both regimes, CRS 2.0 takes priority.

Previously, the IMF warned of global financial risks from stablecoins.