What is Crypto?
Crypto refers to digital assets that allow you to buy, sell, exchange, or transfer value using blockchain-based systems. As crypto activity expanded globally, tax authorities began paying closer attention to how transactions are recorded, particularly when they involve more than one country.
What is the Crypto-Asset Reporting Framework (CARF)?
The Crypto-Asset Reporting Framework, known as CARF, is a global standard developed by the OECD. It allows countries to exchange information about crypto transactions in a structured way, similar to existing systems used for bank accounts.
If you use a crypto exchange or a custodial crypto wallet, CARF focuses on transaction data that helps tax authorities understand cross-border crypto activity.
CARF introduces key terms that are central to its operation:
- RCASPs: Any individual or entity that, as a business, provides services effectuating Exchange Transactions in Relevant Crypto-Assets for or on behalf of customers.
- Relevant Crypto-Assets: Digital representations of value that rely on cryptographically secured distributed ledger or similar technology and can be used for investment or payment. Excluding, Central Bank Digital Currencies (“CBDCs”), and Specified Electronic Money Products (“SEMPs”).
- In-scope exchange transactions: Exchange between Relevant Crypto-Assets and fiat currency; Exchange between one Relevant Crypto-Asset and another; Transfers of Relevant Crypto-Assets; and Payments for goods or services made in crypto-assets where the value of the transaction exceeds USD 50,000.
What is the Latest UAE Crypto Update?
When Will Crypto Reporting Start in the UAE?
The UAE has confirmed that CARF will take effect in 2027. The first automatic exchange of crypto-related information with other participating countries is expected to begin in 2028. This exchange will focus on crypto transactions that involve cross-border activity.
