The highest authority in Switzerland has initiated a public consultation to discuss its plans to adopt global standards for reporting taxes on cryptocurrencies in order to ensure fair treatment in comparison to traditional assets. The Federal Council, a group of seven members who collectively lead the Swiss government, aims to implement the Crypto-Asset Reporting Framework (CARF) to enhance tax transparency. On May 15, the Federal Council launched a consultation paper to gauge public opinion on joining the Automatic Exchange of Information (AEOI), an alliance between international tax administrations aimed at combating tax evasion. Switzerland’s inclusion in the AEOI is scheduled for January 1, 2026.
The Organisation for Economic Co-operation and Development (OECD) established the AEOI and other initiatives for the Group of 20 (G20) nations, which were subsequently extended to include other countries. Switzerland had previously adopted the OECD’s Common Reporting Standard (CRS) in 2014 but had not implemented CARF, which regulates the handling of cryptocurrencies and their providers. Seeking to change this, the Federal Council stated, “Implementation of the CARF will broaden Switzerland’s progressive regulation of the cryptocurrency market and contribute to maintaining the credibility and reputation of the Swiss financial center.”
However, the implementation of CARF will require parliamentary approval and cannot solely rely on the responses received during the consultation period. By 2027, it is expected that approximately 50 countries will fully adopt CARF regulations to collectively combat money laundering. The Swiss federal authority intends to “address gaps in the tax transparency mechanism and ensure equal treatment in relation to traditional assets and financial institutions.”
The consultation process will last for over three months and conclude on September 6. In a related development, the G20 is progressing with an international framework for cryptocurrencies. Additionally, Canada’s annual budget for April 2024 indicated that the country plans to implement CARF for taxation purposes by 2026. The implementation of CARF would introduce new reporting requirements for crypto asset service providers including cryptocurrency exchanges, brokers, dealers, and ATM operators. Once the regulation is in effect, individuals and businesses in Canada will be obligated to report transactions involving cryptocurrency-to-fiat and cryptocurrency-to-cryptocurrency to the Canada Revenue Agency.
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