EU Tax Authorities to Monitor Crypto Transactions Under CARF

EU to enforce DAC8 directive in 2026, requiring crypto exchanges to report transactions.

From January 1, 2026, the European Union will enforce the DAC8 directive, implementing the Crypto-Asset Reporting Framework (CARF). Cryptocurrency exchanges, brokers, and custodial services will begin reporting user transaction data to tax authorities.

As of December 4, a total of 75 jurisdictions have committed to adopting the standard, according to a report by the Organisation for Economic Co-operation and Development (OECD).

What is CARF?

CARF is a reporting standard developed by the OECD at the initiative of the G20. It extends the existing Common Reporting Standard (CRS) to the cryptocurrency sector.

CARF requires cryptocurrency exchanges, brokers, and custodial wallets to report user transactions, including crypto-to-fiat exchanges, crypto-asset trades, and transfers. This information will be automatically shared with the tax authorities of the countries where the clients are residents.

“CARF is a logical continuation of the fight against tax evasion. Previously, tax authorities could track overseas bank accounts through CRS, and now a similar mechanism applies to cryptocurrencies. For honest users, nothing changes, but the era of ‘grey zones’ in the crypto industry is coming to an end,” commented Max Gnatyshin, Head of Operations at Toobit in the CIS.

Who is Affected?

The CARF applies to Reporting Crypto-Asset Service Providers—legal and natural persons providing crypto-asset exchange services. These include:

• centralized exchanges;
• crypto brokers;
• custodial wallets;
• trading platform operators;
• certain DeFi operators with protocol control.

Providers are required to collect information on the tax residency of clients and report transaction data to the relevant authorities in their jurisdiction. This information is then automatically forwarded to the countries where the users are residents.

Implementation Timeline

The timeline varies by region. In the EU, from January 1, 2026, cryptocurrency exchanges will start collecting information, with the first data exchange between tax authorities scheduled for 2027.

Of the 75 jurisdictions committed to CARF, 53 have already signed the multilateral CARF MCAA agreement, providing the legal framework for data exchange.

Singapore and several Asia-Pacific countries have opted for a more cautious approach, delaying implementation until 2027 with the first exchange in 2028. This gives local regulators additional time for adaptation.

How it Works with CRS 2.0

Alongside CARF, the OECD has updated the CRS to version 2.0. They complement each other:

• CRS 2.0 covers financial accounts, including electronic money, central bank digital currencies (CBDC), and access to crypto-assets through derivatives or investment funds;
• CARF focuses directly on crypto transactions at the level of individual operations.

The standards include provisions against double reporting. If an asset falls under both regimes, CRS 2.0 takes precedence.

Previously, the IMF warned of global financial risks due to stablecoins.