Crypto Reporting Shake Up: How CARF Will Transform Transparency
Written by Daniel Dubois
The Australian Government has confirmed that it will implement the OECD’s Crypto-Asset Reporting Framework (CARF) from 2027, with the first exchanges of information between tax authorities scheduled for 2028. Announced as part of the 2025-26 Mid-Year Economic and Fiscal Outlook (MYEFO), the move signals a major shift in the way cryptocurrency transactions and holdings will be monitored and reported for tax purposes.
The new framework is designed to improve global tax transparency and reduce opportunities for tax avoidance involving crypto assets. It will require Australian reporting crypto-asset service providers to collect and report information to the Australian Taxation Office (ATO) regarding crypto assets held by foreign tax residents, as well as certain entities controlled by foreign tax residents. The ATO will then exchange this information with overseas tax authorities in participating jurisdictions.
Current Taxation of Cryptocurrency
Under Australian tax law, cryptocurrency is generally treated as a capital gains tax (CGT) asset rather than as currency. This means that when individuals dispose of crypto assets - including selling them for fiat currency, exchanging one cryptocurrency for another, or using them to purchase goods and services - a CGT event occurs. Any resulting gain or loss must be calculated based on the difference between the asset’s cost base and its market value at the time of disposal. Where crypto is held for more than 12 months, individuals may be eligible for the CGT discount, while losses may be used to offset other capital gains. In certain circumstances, such as where crypto is held as trading stock or forms part of a business operation, different tax treatments may apply. As a result, accurate record‑keeping and correct characterisation of activities are critical to ensuring compliance with Australian tax obligations.
What is CARF?
Developed by the Organisation for Economic Co-operation and Development (OECD), the Crypto-Asset Reporting Framework establishes a standardised global reporting regime for crypto assets. Similar in concept to existing international tax reporting frameworks used for bank accounts and investments, CARF aims to provide tax authorities with greater visibility over cross-border crypto activity.
The framework covers a broad range of digital assets, including cryptocurrencies and other blockchain-based assets, and applies to reporting crypto-asset service providers such as exchanges and platforms facilitating crypto transactions.
Domestic Reporting Also Expanding
In addition to implementing CARF, the Government has announced a separate domestic crypto tax reporting framework commencing from 2027, with reporting to the ATO beginning in 2028. While limited detail has been released so far, the domestic regime is expected to further strengthen the ATO’s ability to monitor crypto-related tax obligations within Australia.
It remains unclear whether the new domestic reporting system will replace the ATO’s current crypto asset data-matching program, which already collects transaction data from designated crypto service providers, however there is a reasonable expectation that the information will be integrated into the ATO’s systems.
Increased Compliance Obligations
The introduction of CARF will significantly increase compliance obligations for crypto-asset service providers and potentially financial institutions involved with digital assets. Businesses may need to update onboarding procedures, customer due diligence processes, record-keeping systems, and reporting technology to ensure compliance with the new rules.
The OECD has already released detailed CARF guidance, including reporting rules, commentary, XML schemas, and implementation guidance for tax administrations. However, further Australian consultation is expected on draft legislation and practical reporting requirements before implementation begins.
Potential Link to CRS 2.0
Although not formally announced in MYEFO, industry expectations are that Australia will also implement the OECD’s updated Common Reporting Standard framework — commonly referred to as “CRS 2.0” - alongside CARF from 2027.
The revised CRS rules include amendments relating to digital assets and are intended to align international reporting obligations while avoiding duplicated reporting requirements. The OECD has already updated the CRS XML reporting schema, which participating jurisdictions are expected to adopt from January 2027.
What This Means for Investors
For cryptocurrency investors, the changes reinforce the importance of maintaining accurate records and ensuring crypto transactions are properly disclosed for tax purposes. As international reporting becomes more sophisticated and automated, tax authorities will have greater access to information regarding offshore crypto holdings and transactions.
The Government estimates that the measures will increase tax collections by approximately AUD 170 million across the 2027/28 and 2028/29 financial years, highlighting the growing regulatory focus on the crypto sector.
Preparing for the Changes
While implementation is still some time away, the announcement provides certainty around timing and allows affected businesses to begin preparing for the new reporting environment. Crypto service providers, financial institutions, and investors should closely monitor future Treasury consultations and draft legislation as additional details emerge over the coming years.
As crypto regulation continues to evolve globally, Australia’s adoption of CARF represents another step toward integrating digital assets into mainstream financial reporting and tax compliance frameworks.
If you would like guidance on how these upcoming changes may affect your personal investments, business operations, or reporting obligations, please contact our team to discuss your situation.