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A new era of global cryptocurrency transparency has begun, with the United Kingdom and 47 other jurisdictions enforcing strict new reporting rules as of January 1 to combat tax evasion and ensure cryptocurrency compliance.
While the “first wave” of countries has already started collecting transaction records according to the Financial Times, the Philippines has committed to joining the initiative’s second wave, with data exchanges scheduled to commence by 2028, marking a significant step towards cryptocurrency regulation in the country.
The First Wave: 48 Countries
New regulations known as the Crypto-Asset Reporting Framework (CARF), developed by the Organization for Economic Co-operation and Development (OECD), came into force this week for an initial group of 48 countries, aiming to promote cryptocurrency transparency and tax compliance.
Starting January 1, major cryptocurrency exchanges operating in jurisdictions such as the UK, Brazil, Japan, and most EU member states are required to collect detailed transaction records, including:
- The identity and tax residency of users, ensuring know-your-customer (KYC) and anti-money laundering (AML) compliance.
- The value of crypto assets sold or exchanged, providing insights into cryptocurrency market trends.
- Any profits made from transactions, facilitating tax calculations and financial reporting.
These collected records will be automatically shared between participating tax authorities starting in 2027, effectively closing the loop on investors attempting to hide digital assets offshore and promoting global cryptocurrency governance.
“This is the beginning of the end for crypto investors who thought they could invest and gain from crypto in secrecy from tax and other law enforcement agencies,” said Andrew Park, a tax investigations partner at Price Bailey, as reported by the Financial Times, highlighting the importance of cryptocurrency regulation and tax compliance.
The Philippine Context: 2028 Target
While the Philippines is not part of the initial 2027 exchange group, it has been identified as a key participant in the framework’s expansion, demonstrating the country’s commitment to cryptocurrency regulation and financial transparency.
According to the latest OECD commitments, the Philippines is listed among 27 jurisdictions pledging to implement CARF in time to commence data exchanges by 2028. (Read more: DOF: PH to Adopt Crypto Tax Framework By 2028 to Combat Tax Evasion)
This places the Philippines alongside major regional crypto hubs and neighbors including:
- Singapore, a leading cryptocurrency exchange hub.
- Hong Kong, a key financial center in Asia.
- Thailand, a growing cryptocurrency market.
- Malaysia, a significant digital economy player.
Once implemented, the Bureau of Internal Revenue (BIR) would gain access to a global information-sharing network, enabling the agency to monitor cryptocurrency transactions and ensure tax compliance among Filipino taxpayers.
What is CARF?
The Crypto-Asset Reporting Framework (CARF) is a global standard designed to ensure that crypto assets are not used to evade taxes, promoting financial transparency and cryptocurrency regulation. It mandates that crypto service providers — such as exchanges and wallet providers — collect information on their users’ transactions and report it to tax authorities.
Overall, 75 countries have committed to the rules, demonstrating a global effort to establish cryptocurrency standards and regulatory frameworks.
- 2027 Exchange: Includes UK, EU, Japan, Brazil, South Africa, marking the beginning of global cryptocurrency governance.
- 2028 Exchange: Includes Philippines, Singapore, Hong Kong, UAE, Australia, further expanding cryptocurrency regulation in the Asia-Pacific region.
- 2029 Exchange: The United States, a major cryptocurrency market, will join the framework, solidifying global cryptocurrency standards.
Why This Matters for Filipino Investors
The Philippines’ inclusion in the 2028 cohort provides a clear timeline for local investors and the industry, allowing them to prepare for cryptocurrency regulation and tax compliance.
- End of Anonymity: While there is a lead time of two years, the eventual implementation means that trading data from platforms in Singapore, Hong Kong, or Europe will eventually be visible to Philippine tax authorities, promoting financial transparency.
- Regulatory Preparation: The timeline gives local regulators and exchanges time to upgrade their systems to comply with the complex reporting standards required by the OECD, ensuring cryptocurrency compliance.
- Tax Compliance: Filipino investors using international platforms should be aware that their transaction history will effectively become transparent to the BIR once the data-sharing bridges are built in 2028, highlighting the importance of tax planning and cryptocurrency accounting.
This article is published on BitPinas: Global Crypto Tax Crackdown Begins; Philippines Committed to Data Exchange by 2028
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