Automatic Exchange of Crypto Tax Information Between Countries: What You Need to Know in 2025

For the first time in history, your crypto trades might be automatically shared with your home country’s tax agency-even if you bought Bitcoin on a platform based halfway across the world. This isn’t science fiction. It’s happening now, and by January 1, 2026, it will be mandatory in the European Union and over 60 other countries. If you’ve ever traded, staked, or swapped crypto, this change affects you. No more hiding behind anonymous wallets or offshore exchanges. The global tax net is closing in-and it’s digital, fast, and hard to avoid.

How the System Actually Works

The engine behind this global shift is called the Crypto-Asset Reporting Framework, or CARF. It was created by the OECD, the same group that runs the Common Reporting Standard (CRS) for bank accounts. Think of CARF as CRS for crypto. Instead of banks reporting your savings to foreign tax authorities, now crypto exchanges, wallets, and even decentralized finance platforms must report your transactions.

Here’s how it flows:

• You make a trade on Binance, Kraken, or even a DeFi protocol like Uniswap.
• If the platform is based in a CARF-participating country, it collects your name, address, tax ID, and details of every crypto transaction-buys, sells, swaps, staking rewards, airdrops, even NFT sales.
• That data is sent to your country’s tax authority once a year, in a standardized digital format (XML).
• Your home country matches this with your tax return. If you didn’t report the gain? They’ll know.

It doesn’t matter if you used a non-custodial wallet. If you traded through a regulated platform, they’re required to report. And if you used a platform outside your country? The platform still reports to its own government, which then sends your info to yours. The system is reciprocal. The U.S. sends data on foreign users to other countries. Other countries send data on U.S. residents to the IRS.

Who’s Covered-and Who Isn’t

As of late 2025, 67 countries have committed to implementing CARF by 2028. That includes every major economy: the entire European Union, the UK, Canada, Australia, Japan, South Korea, Singapore, and more. The EU’s version, called DAC8, kicks in on January 1, 2026. That means EU residents must start reporting crypto gains for the 2026 tax year, even if they traded on a U.S.-based exchange.

The U.S. is a special case. It doesn’t adopt CARF directly, but it has its own rules. The IRS now requires non-U.S. crypto brokers to report on U.S. customers. In return, the U.S. shares data on Americans who trade on foreign platforms. So even if you live in New Zealand and trade on Coinbase (a U.S. company), your info goes to the IRS-and then to New Zealand’s Inland Revenue Department if you’re a resident.

But not everyone is on board. Some jurisdictions still resist full transparency. Places like the Cayman Islands, certain Caribbean islands, and parts of the Middle East haven’t committed. That doesn’t mean you’re safe. If you’re a resident of a CARF country, your home tax authority doesn’t care where you traded-they’ll still get your data from the platform’s home country.

What Exactly Gets Reported

It’s not just “I bought Bitcoin.” The reporting is detailed. Here’s what platforms must collect and send:

• Your full legal name and residential address
• Your tax identification number (TIN) or equivalent
• Every crypto-to-fiat sale (e.g., BTC to USD)
• Every crypto-to-crypto trade (e.g., ETH for SOL)
• Staking rewards, yield farming income, and mining payouts
• Airdrops received through platform accounts
• NFT sales and purchases if done via a regulated service
• Transfer details: from which wallet, to which wallet, and the value at time of transfer

Even if you didn’t cash out, you still owe tax on gains. Selling ETH for SOL? That’s a taxable event. Getting 0.5 BTC as a staking reward? That’s income. The platform reports the fair market value in your local currency at the time of the transaction. Your tax agency uses that number to calculate your liability.

Why This Is a Game Changer

Before CARF, crypto tax evasion was easy. You could trade on unregulated platforms, use mixers, or hold assets in wallets with no KYC. Tax agencies had no way to track it. Now, the system is designed to close every major loophole.

The OECD didn’t build this from scratch. They studied the CRS, which has been collecting bank data since 2014. Over 110 countries use it. It worked. Now they’ve adapted it for crypto. The XML format is the same. The reporting deadlines are similar. The penalties for non-compliance? Also similar.

This isn’t just about catching tax evaders. It’s about legitimacy. Governments want crypto to be part of the financial system-not a parallel economy. By forcing transparency, they’re making crypto trading as visible as stock trading. That’s good for long-term adoption. It’s bad for people who thought they could avoid taxes.

What This Means for You

If you’re a crypto user in a CARF country, you have three choices:

1. Comply. Keep detailed records of every transaction. Use tax software like Koinly, CoinTracker, or TokenTax to calculate gains and losses. File your return accurately. This is the only safe path.
2. Ignore it. Hope you don’t get caught. Risky. Tax agencies now have AI tools that cross-reference crypto reports with bank deposits and lifestyle spending. If your income jumps 40% and you didn’t report it? You’re on their radar.
3. Move. Relocate to a non-CARF country. But even then, if you’re a tax resident of a CARF country, they still have jurisdiction over your global income. You can’t outsource your tax liability by moving your body.

The truth? The window for hiding crypto gains is closing fast. By 2027, most major economies will be exchanging data. The first wave of audits will begin in 2028. Those who waited until then will face back taxes, penalties, and interest.

What Platforms Are Doing to Comply

Major exchanges like Binance, Coinbase, and Kraken are already building CARF-compliant systems. They’re upgrading their KYC processes, adding fields for tax IDs, and restructuring their reporting pipelines. Smaller platforms are struggling. Many don’t have the tech or legal team to handle it.

Some platforms are choosing to block users from CARF countries entirely. Others are partnering with third-party tax reporting firms to automate the process. The cost of compliance is high-but the cost of non-compliance is higher. Fines can reach 100% of the unreported gain. In some countries, it’s criminal.

The real challenge? Decentralized finance. CARF applies to “Reporting Crypto-Asset Service Providers.” That means centralized platforms. But if you swap tokens directly on a smart contract, who reports? The answer? No one-yet. But tax agencies are watching. They’re developing new tools to track on-chain activity. The next step may be blockchain analytics firms feeding data directly to tax authorities.

What to Do Now

Don’t wait for an audit letter. Start now:

• Export your complete transaction history from every exchange and wallet you’ve used since 2020.
• Use a crypto tax tool to calculate your gains and losses. Don’t guess.
• File any missing returns for past years. Many countries have voluntary disclosure programs with reduced penalties.
• Keep records for at least seven years. That’s the standard audit window in most CARF countries.
• Know your tax residency. If you live in New Zealand, Australia, or the UK, you’re taxed on worldwide income. Where you trade doesn’t matter.

If you’re unsure where to start, talk to a tax professional who understands crypto. This isn’t something you can wing. The rules are complex, and the stakes are high.

The Bigger Picture

This isn’t just about taxes. It’s about the future of money. Crypto was born as a way to escape control. But now, governments are using the same technology to bring it under control. Blockchain’s transparency is being turned against its users.

The good news? You don’t have to be afraid of the system. You just have to be prepared. Pay your taxes. Keep good records. Stay compliant. Crypto isn’t going away. And neither is the taxman.