← Back to guides

Tax Reporting Obligations for Crypto Companies

2026-03-31 · Web3 Compliance AI

The Evolving Tax Landscape

Tax authorities worldwide have moved aggressively to close the crypto tax reporting gap. Two major frameworks are reshaping the landscape: the OECD's Crypto-Asset Reporting Framework (CARF) and the US Infrastructure Act's broker reporting requirements. Crypto businesses must now build tax reporting into their operational infrastructure.

OECD Crypto-Asset Reporting Framework (CARF)

CARF is the global standard for automatic exchange of tax information related to crypto-assets. Finalized in 2023 and being implemented through 2027, it requires Reporting Crypto-Asset Service Providers to: identify the tax residence of each customer, collect tax identification numbers, report annually to their local tax authority the aggregate proceeds from crypto dispositions for each reportable customer, and include details of each type of crypto-asset transacted.

Over 50 jurisdictions have committed to implementing CARF. The reporting goes to the local tax authority, which then exchanges information with other jurisdictions under the Common Reporting Standard (CRS) framework.

European Union — DAC8

The EU implemented CARF through DAC8 (Directive on Administrative Cooperation, 8th revision). DAC8 requires all EU-based crypto-asset service providers to report customer transaction data to their local tax authority starting January 2026. The reporting includes: customer identification and tax residence, transaction types and volumes, aggregate consideration received, and fair market values. Non-compliance penalties are set by each member state but must be "effective, proportionate and dissuasive."

United States — Broker Reporting (Form 1099-DA)

The Infrastructure Investment and Jobs Act (2021) expanded the definition of "broker" to include crypto exchanges, certain DeFi protocols, and other intermediaries. Key obligations:

  • Form 1099-DA — Brokers must report gross proceeds from crypto dispositions, beginning with the 2025 tax year (forms issued in early 2026). Cost basis reporting phases in for 2026.
  • Information collection — Brokers must collect customer tax identification numbers (SSN/EIN for US persons, or W-8 for foreign persons).
  • Transfer statements — When crypto is transferred between brokers, the sending broker must provide cost basis information to the receiving broker.

The IRS has issued final regulations (TD 10000 and TD 10001) with detailed implementation rules. DeFi front-ends that effectuate transactions are included in the broker definition beginning 2027.

United Kingdom

HMRC requires crypto-asset businesses to report under the UK implementation of CARF, effective from 2026. Additionally, crypto is subject to Capital Gains Tax for individuals and Corporation Tax for businesses. HMRC has been actively sending "nudge letters" to crypto users and conducting data-sharing agreements with exchanges.

Singapore

IRAS (Inland Revenue Authority of Singapore) treats crypto payments received as business income and applies GST rules. Singapore has committed to CARF implementation. Crypto businesses must maintain transaction records sufficient for tax reporting purposes.

Practical Implementation

  1. Collect TINs early — Implement tax identification number collection in your onboarding flow. Retroactive collection is painful.
  2. Build reporting infrastructure — Invest in systems that can aggregate transaction data by customer, by crypto-asset type, and by tax jurisdiction.
  3. Cost basis tracking — Track acquisition cost for each unit of crypto-asset. Use a consistent method (FIFO, specific identification) as required by the applicable jurisdiction.
  4. Engage tax counsel — Tax reporting rules are technically complex and penalties are significant. Get professional guidance specific to each jurisdiction.
  5. Calendar management — Different jurisdictions have different reporting deadlines. Build a compliance calendar and assign responsibility for each filing.