Ireland commits to crackdown on cryptocurrency tax evasion

The move would mean information on cryptocurrency assets will be shared between the different jurisdictions in an effort to clamp down on tax evasion. The Organisation for Economic Cooperation and Development (OECD) published the CARF in 2022. Cryptocurrency assets have posed problems for regulators, as they can be transferred and stored in a decentralised manner without interacting with traditional financial intermediaries The CARF would provide the framework for the automatic reporting and exchange of information of cryptocurrency assets. In a joint statement, the 47 countries said: “To keep pace with the rapid development and growth of the crypto asset market and to ensure that recent gains in global tax transparency will not be gradually eroded, we welcome the CARF. “The widespread and timely implementation of the CARF will further improve our ability to ensure tax compliance and clamp down on tax evasion, which reduces public revenues and increases the burden on those who pay their taxes. “We invite other jurisdictions to join us with a view to enhancing the global system of automatic information exchange which leaves no hiding places for tax evasion.” The countries committed to transposing the CARF into domestic law by 2027. As well as Ireland, signatories included most major EU states, Brazil, Japan, the United Kingdom and the United States, as well as many smaller territories such as Belize and the Cayman Islands. Ireland has become a significant base of operations for many cryptocurrency firms in recent years, including the likes of Coinbase. The US-based firm, which is one of the world’s largest cryptocurrency exchanges, chose Ireland as the site of its European hub. Other firms in the sector with a presence in Ireland include the likes of MoonPay, a cryptocurrency company backed by celebrities such as Justin Bieber and Gwyneth Paltrow, which opened an office in Ireland in August after being cleared by the Central Bank. The eagerness of cryptocurrency firms to set up in Ireland comes despite the regulator’s hostility to digital assets, with Central Bank governor Gabriel Makhlouf previously comparing cryptocurrencies to “Ponzi schemes”. Mr Makhlouf has also promised tighter controls of digital assets and cryptocurrencies.