Technical Definition

CARF

CARF is the OECD's international framework for standardized collection and automatic exchange of tax-relevant information about certain crypto-asset transactions.

By Crypto University Editorial
Taxable eventCost basisForm 1099-DA

✦ Key Insight

Crypto users and service providers may face greater tax reporting and information-sharing requirements as jurisdictions implement CARF.

✕ Common Misconceptions

CARF is an international framework, not one worldwide tax law. Implementation dates and obligations depend on each jurisdiction.

Detailed Explanation

CARF was developed to improve tax transparency where crypto assets can be transferred outside traditional financial intermediaries. Participating jurisdictions implement reporting rules for relevant crypto-asset service providers and exchange information with other tax authorities.

In Practice

“A crypto service provider in an implementing jurisdiction may need to report qualifying customer transaction information for exchange with another participating tax authority.”

Dig Deeper

Cost basis

Cost basis is the tax value assigned to an asset, generally based on acquisition cost and applicable adjustments, that is used when calculating gain or loss.

Form 1099-DA

Form 1099-DA is a United States tax information form used by applicable brokers to report digital asset sales or dispositions to customers and the IRS.

Taxable event

A taxable event is a transaction or activity that creates a tax consequence under the rules of the relevant jurisdiction.

Tax Reporting

Tax reporting is the process of declaring taxable crypto income, gains, losses, holdings, or transactions to the relevant authority.