Switzerland's Federal Council to Consider Global Standards for Crypto Tax Reporting
Summary:
Switzerland's Federal Council is considering global standards for cryptocurrency tax reporting to ensure fair treatment as traditional assets. They aim to implement the Crypto-Asset Reporting Framework (CARF) to augment tax transparency. The governing body, comprised of seven members, has begun a public consultation to gauge opinions about joining the Automatic Exchange of Information (AEOI), an international initiative battling tax evasion. This move towards transparency could see the CARF fully adopted by almost 50 countries by 2027. The consultation will end on September 6.
Switzerland's leading governing body, the Federal Council, recently began a public consultation regarding their plans to conform to international standards for cryptocurrency tax reporting, to ensure an equivalent treatment to traditional assets. The governing council, consisting of seven members, has proposed the implementation of the Crypto-Asset Reporting Framework (CARF) in order to enhance taxation transparency. On May 15, a consultation paper was launched by the council to gather public opinions on joining the Automatic Exchange of Information (AEOI), an initiative aimed at combating tax evasion, cooperatively organised by global tax agencies. The move to integrate into the AEOI by Switzerland is projected to happen on January 1, 2026.
Originally established by the Organisation for Economic Co-operation and Development (OECD) for the Group of 20 (G20) nations, the AEOI and similar initiatives were later included by other countries. Although Switzerland integrated with the OECD’s Common Reporting Standard (CRS) in 2014, it did not include the CARF, which is responsible for the regulation of crypto assets and their providers. The Federal Council, in an effort to amend this, voiced that executing the CARF would foster Switzerland's forward-thinking cryptocurrency market regulation and uphold the international prestige of the Swiss financial hub. However, approval from the parliament is required for implementing the CARF and it cannot rely solely on the results of the consultation paper.
It is anticipated that by 2027, about 50 countries will fully comply with CARF regulations to mutually combat money laundering. The Swiss federal authority aims to "bridge the gap in the tax transparency process and ensure equivalent treatment in comparison to traditional assets and financial establishments." The consultation continues for over three months, concluding on September 6.
As a related point, G20 is progressing with an international cryptocurrency framework. In April 2024, Canada suggested in its yearly budget that it would also incorporate CARF for tax purposes by 2026. The new regulation would necessitate fresh reporting protocols for crypto-asset service providers (CASPs), incorporating cryptocurrency exchanges, crypto-asset dealers and brokers, and operators of crypto-asset automated teller machines. The directives stipulate that, upon the commencement of this regulation, Canadian businesses and individuals would be obliged to disclose transactions between cryptocurrencies and fiat and transactions involving exchanges of different cryptocurrencies to the Canada Revenue Agency (CRA).
Published At
5/16/2024 10:33:14 AM
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