CARF is an international tax standard developed by the Organization for Economic Cooperation and Development (OECD). This standard will enable automated exchange of tax information on digital assets. It will require virtual asset service providers (VASPs) to collect tax information from users and share it with tax authorities. They will then share this information with other departments.
The Government of Canada will implement the CARF system within two years. This standard is expected to be used worldwide by 2027. Forty-eight OECD members have already agreed to implement CARF last year. These countries included the US, Brazil, UK, Germany and Mexico. South Africa is the only African country on the list that has promised to implement new standards in November 2023.
Canadian authorities fear that the rapid growth of the crypto-asset market creates greater risks of tax evasion. In the 2024 budget, Canadian authorities proposed to allocate $37.6 million to the Internal Revenue Service to implement new standards. The department will receive $5.32 million annually for their maintenance.
Let us remind you that the US Internal Revenue Service (IRS) recently introduced a new form for reporting income received from cryptocurrency transactions, which will be applied from January 1, 2025.
Source: Bits
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