Since its inception last decade, the international Automatic Exchange of Information (AEOI) framework has been hugely successful in tackling offshore tax non-compliance. Given that the current regime only covers traditional financial assets, it highlights the significant gap around crypto assets, particularly given their prevalence and strong indicators suggesting a very high non-compliance rate globally regarding their associated tax liabilities.

The OECD’s latest flagship tax transparency standard, the Crypto-Asset Reporting Framework (CARF) provides for AEOI on crypto exchanges for the purpose of combating offshore tax non-compliance. It is an extension of the existing AEOI framework and has been designed to achieve this effectively and efficiently simply extending the existing AEOI processes to crypto exchanges.

The CARF was approved as an international standard in June 2023. A number of jurisdictions have committed to its early adoption via a voluntary announcement process with an aspiration to commence exchanges in 2027. A similar process of voluntary announcement was run for the Common Reporting Standard (CRS) in 2014 with that proving critically important in delivering and setting up the international system of AEOI that operates so effectively today, which over 100 countries have since adopted. Gibraltar was an early adopter of the CRS in 2017 demonstrating our commitment to upholding global transparency standards in taxation and the exchange of information. Whilst this voluntary announcement process is a jurisdiction-led initiative, separate from the formal processes led by the OECD’s Global Forum, their Secretariat has welcomed this and indicated that it will be important for helping to deliver its aims. Gibraltar once again reaffirms it steadfast commitment to international tax cooperation, good governance and transparency in combatting offshore tax non-compliance by participating in this voluntary announcement process.

A copy of the joint statement text is reproduced below.

 “10 November 2023

 COLLECTIVE ENGAGEMENT TO IMPLEMENT THE CRYPTO-ASSET REPORTING FRAMEWORK

 Joint Statement by: Armenia, Australia, Austria, Barbados, Belgium, Belize, Brazil, Bulgaria, Canada, Chile, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Liechtenstein, Lithuania, Luxembourg, Malta, Mexico, Netherlands, Norway, Portugal, Romania, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, the United Kingdom, and the United States of America; the Crown Dependencies of Guernsey, Jersey, and Isle of Man; and the United Kingdom’s Overseas Territories of the Cayman Islands and Gibraltar.

 To keep pace with the rapid development and growth of the crypto-asset market and to ensure that recent gains in global tax transparency will not be gradually eroded, we welcome the new international standard on automatic exchange of information between tax authorities developed by the OECD – the Crypto-Asset Reporting Framework (CARF). The widespread, consistent and timely implementation of the CARF will further improve our ability to ensure tax compliance and clamp down on tax evasion, which reduces public revenues and increases the burden on those who pay their taxes.

 As jurisdictions that play host to active crypto markets, we therefore intend to work towards swiftly transposing the CARF into domestic law and activating exchange agreements in time for exchanges to commence by 2027, subject to national legislative procedures as applicable. In order to ensure consistency and a smooth implementation for both business and governments, those of us that are signatory jurisdictions to the Common Reporting Standard will also implement, in line with the above timeline and subject to national legislative procedures as applicable, amendments to this standard as agreed by the OECD earlier this year.

 We invite other jurisdictions to join us with a view to enhancing the global system of automatic information exchange which leaves no hiding places for tax evasion."

ENDS