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Switzerland Adopting Global Standards for Crypto Tax Reporting
May. 16, 2024. 2 mins. read.
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Switzerland's Federal Council is consulting the public on adopting global crypto tax reporting standards to ensure equal treatment of crypto and traditional assets, enhancing tax transparency.
Switzerland’s highest authority has initiated a public consultation on adopting global standards for crypto tax reporting to ensure equal treatment of crypto assets and traditional assets. The Federal Council, comprising seven members who collectively head the Swiss government, aims to implement the Crypto-Asset Reporting Framework (CARF) to enhance tax transparency.
On May 15, the Federal Council released a consultation paper to gauge public sentiment on joining the Automatic Exchange of Information (AEOI), an international cooperation between tax administrations to combat tax evasion. Switzerland plans to extend its participation in the AEOI starting 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 later extended to include additional countries. Switzerland previously adopted the OECD’s Common Reporting Standard (CRS) in 2014 but excluded CARF, which governs the handling of crypto assets and their providers. Planning to address this omission, the Federal Council stated:
“Implementation of the CARF will expand Switzerland’s progressive crypto market regulation and help to maintain the credibility and reputation of the Swiss financial center.”
However, the CARF implementation will require parliamentary approval and cannot be based solely on responses to the consultation paper.
By 2027, nearly 50 countries are expected to fully adopt CARF regulations to collectively combat money laundering. The Swiss federal authority aims to “close gaps in the tax transparency mechanism and ensure equal treatment with respect to traditional assets and financial institutions.”
The consultation will run for over three months and conclude on September 6.
In a related development, Canada’s annual budget in April 2024 suggested that the country would implement CARF for taxation by 2026. The CARF would impose new reporting requirements on crypto asset service providers, such as cryptocurrency exchanges, crypto-asset brokers, and crypto-asset automated teller machine operators. When the regulation takes effect, Canadian individuals and businesses will be required to report transactions between crypto assets and fiat currencies, as well as crypto-to-crypto transactions, to the Canada Revenue Agency.
SOURCE: Swiss leaders plan to enforce global crypto reporting framework
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