G20 calls for cryptocurrency tax reporting rules and information exchange

India and other countries hope to have a crypto-asset reporting framework in place by 2027.

According to a report by The Times of India on September 9, G20 leaders are rapidly developing a crypto asset reporting framework.

The framework will enable G20 members to collect and share information on the use of cryptocurrencies and digital assets. This data will be used to ensure that people using cryptocurrencies do not evade taxes.

G20 leaders stressed that the plan should be enacted as soon as possible, writing:

“We call for the rapid implementation of the Crypto-Asset Reporting Framework (“CARF”) and revisions to the [Common Reporting Standard] CRS.”

In the same statement, the leaders asked the Global Forum for Tax Transparency and Information Exchange to determine a timetable for launching an information exchange program. According to reports, the relevant countries aim to launch the program before 2027.

The Times of India stated that the G20 leaders’ declaration was unanimously adopted, but did not describe the subsequent steps to create a framework.

Union Finance Minister Nirmala Sitharaman has suggested that the International Monetary Fund (IMF) and the Financial Stability Board (FSB) will define the “contours” of a cryptocurrency framework. The statement was published in a separate report from Livemint.

G20 has broader tax plan

While the latest statement from G20 leaders focuses in part on cryptocurrency reporting, the group intends to reform tax reporting more broadly. The Common Reporting Standard (CRS) is intended to apply to other non-financial assets, such as real estate.

In addition, some 140 countries, including India, plan to develop an international, two-pillar tax plan that will force many multinational companies to pay minimum taxes - although this plan has not yet been implemented.

G20 leaders also expressed their desire to establish a stablecoin management agency in a paper published on September 7. The report suggests that stablecoins can cause volatility and pose risks to financial stability, requiring new regulation.

India plays a central role in the latest developments as it is currently hosting the 2023 G20 Summit in its capital New Delhi.