CARF: Crypto Tax Reporting Begins in 2026

The Cryptoasset Reporting Framework is a set of rules developed by the Organisation for Economic Co-operation and Development (OECD), first published in 2022 and finalised in June 2023. It was created to extend the tax transparency infrastructure that already applies to bank accounts and conventional financial assets to the cryptoasset sector.

The OECD's Common Reporting Standard, which has been in force since 2016, requires financial institutions to report information about the accounts of foreign residents to their local tax authorities, which then share it internationally. This system allows tax authorities in one country to receive information about a resident's financial accounts held in another country.

Because cryptoassets are not covered by the Common Reporting Standard, the OECD identified a gap: crypto held on exchanges could, in principle, sit outside the reporting network that applies to bank deposits and investment accounts. CARF was designed to close that gap by applying equivalent reporting obligations to cryptoasset service providers.

The UK confirmed its adoption of CARF in 2023. Secondary legislation — the Reporting Cryptoasset Service Providers (Due Diligence and Reporting Requirements) Regulations 2025 — was introduced in June 2025 and came into force on 1 January 2026.

RCASPs are required to collect a standardised set of information about their users and about those users' transactions. The framework specifies the categories of data that must be gathered and reported, and these are consistent across all jurisdictions implementing CARF to allow international data exchange.

For each reportable user, exchanges must collect identifying information — including name, address, date of birth, tax identification number, and country of tax residence. For corporate users, equivalent entity-level and controlling-person information is required.

For each user's transactions during the reporting year, the exchange must record the type of transaction, the date, the quantity of cryptoasset involved, the fiat currency value, and the gross proceeds or consideration. This covers exchanges between cryptoassets and fiat currency, exchanges between different cryptoassets, and transfers in or out of wallets.

Exchanges are required to collect this information for all users, but they only need to report to HMRC on users who are tax resident in the UK or in another jurisdiction that has signed up to CARF. A user's tax residency is established through a self-certification that the exchange requests from the user.

The UK is part of an initial group of 48 jurisdictions that committed to implement CARF with exchanges commencing in 2027. This includes all EU member states, as well as other significant financial centres. Further jurisdictions — including the UAE, Hong Kong, Singapore and Switzerland — have committed to implement CARF and begin exchanges in 2028. The United States is expected to implement with exchanges beginning in 2029.

The international dimension matters because it means that UK residents who use exchanges based in other CARF-implementing countries will also have their data reported to HMRC by those foreign exchanges, through the international exchange of information network. Similarly, UK exchanges will report data on their non-UK resident users to those users' home tax authorities.

The result is a reporting system that is significantly more comprehensive than anything previously applied to the cryptoasset sector. This also covers new UK crypto investment products like crypto ETNs that fall within HMRC's reporting net — ETN gains remain subject to Capital Gains Tax and will appear in exchange reporting data. Transactions that were previously invisible to tax authorities — because they occurred on foreign exchanges or were not voluntarily declared — will increasingly appear in HMRC's data flows.