Crypto Asset Reporting Framework (CARD)
Recently the Organization for Economic Co-operation and Development (OECD) has released the ‘Crypto-Asset Reporting Framework (CARF)’.
CARF provides for reporting of tax-related information on transactions in crypto-assets in a standardized manner. Its purpose is to promote automatic exchange of such information.
CARF aims to tackle the trend of international tax evasion by using digital assets like cryptocurrencies.
The framework has been released at a time when the crypto industry’s capitalization grew from $715 billion to $3 trillion and then recorded a steep decline.
Crypto-Asset Reporting Framework
- This includes exchanges, brokers and ATM operators that facilitate transactions between relevant crypto assets.
- CARE is compliant with the Common Reporting Standard (CRS) of the Organization for Economic Co-operation and Development (OECD).
- CARF mandates a proper vigilance process in identifying both individual and entity customers.
- Similar vigilance has also been required in the case of controlling persons for self-identification.
- CARF sets reporting requirements for crypto asset companies in the countries where they operate.
- The exchange of crypto between fiat currencies and relevant crypto assets, as well as reporting of crypto transfers (including retail payments), is also required.
Common Reporting Standard (CRS)
- It was published by the OECD in the year 2014. CRS ensures transparency on cross-border financial investments and tackles tax evasion abroad.
- Digital currency issued by central banks has been included in CRS instead of CARF.
Cryptocurrency –
- It is a digital, encrypted and decentralized medium of exchange. It is estimated that there are 15 million to 20 million crypto investors in India. Their total crypto holdings are around Rs 40,000 crore.
- However, there is no official data available on the size of the Indian crypto market. India has always been supportive of a global framework for regulating cryptocurrencies.
Source – The Hindu
