UK and 40+ nations begin enforcing CARF for crypto taxes
Over 40 countries have started implementing sweeping new rules that seek to make crypto taxes more transparent and harder to avoid.
According to a Financial Times report, crypto exchanges in the UK will now be required to collect complete details of user activity and report it to HM Revenue & Customs under global rules developed by the OECD, known as the Cryptoasset Reporting Framework.
The rules officially came into effect on January 1, 2026.
What does the new rule mean for crypto investors?
Under the CARF framework, crypto-asset service providers will be gathering detailed information such as full legal names, addresses, dates and places of birth, and tax identification numbers for individual users.
For entities, the data must include legal names, addresses, TINs, and the same personal information for any controlling persons or beneficial owners.
On top of this, service providers will be required to obtain a signed self-certification from users confirming their tax residency. Failure to provide this could result in suspension of account services or financial penalties.
CARF requires reporting on a transaction-by-transaction basis, covering all exchanges between crypto-assets and fiat currencies, as well as trades between different types of crypto-assets.
Meanwhile, the movement of assets between wallets or accounts will also be tracked, including transfers to self-hosted wallets not linked to any provider.
Payments made using crypto that surpass $50,000 must also be reported under this framework.
Failure to comply with these obligations would result in penalties for users and for service providers; any reporting failures or deliberate non-compliance could mean substantial fines.
Other jurisdictions to follow the UK
The UK is among the first wave of jurisdictions that will start enforcing CARF-based reporting rules in 2026.
Subsequently, from 2027, HMRC will be sharing the collected information with tax authorities in other participating jurisdictions that include all EU countries, like Germany, France, Italy, and Spain, as well as Brazil, Canada, Japan, and South Korea.
“Crypto investors living in signatory jurisdictions like the UK need to be aware that their crypto data is going to be routinely shared with their tax authorities and need to carefully consider whether they are fully tax compliant,” Andrew Park, a tax investigations partner at Price Bailey, told FT.
Globally, 75 countries have committed to implementing the CARF rules, with jurisdictions like the UAE, Hong Kong, Singapore, and Switzerland set to begin collecting data from 2027. Information sharing for these countries will begin in 2028.
Likewise, the United States, while not a direct participant under the OECD’s multilateral exchange agreement, will also implement its own parallel regime and begin information exchanges in 2029.
“HMRC has been concerned for some time about high levels of non-compliance among crypto investors,” Dawn Register, a tax dispute resolution partner at accountancy firm BDO, told FT, adding that the international exchange framework would give HMRC a “richer dataset” and allow it “to better target those UK tax residents it suspects of failing to correctly declare their gains.”
Between 2024 and 2025, the UK tax authority significantly ramped up enforcement, sending over 65,000 letters to individuals suspected of owing taxes on their crypto holdings.
Spain adopts DAC8
As previously reported by Invezz, Spain will adopt DAC8, which is the European Union’s legal instrument for implementing the global CARF rules within all EU member states.
While broadly aligned with the CARF framework, DAC8 introduces several EU-specific nuances.
These include its legally binding application across the bloc, terminology harmonised with existing EU regulations such as MiCA, and an explicit extraterritorial scope requiring non-EU crypto service providers with EU clients to report through a designated member state.
The post UK and 40+ nations begin enforcing CARF for crypto taxes appeared first on Invezz
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