By PAUL O’DONOGHUE, Senior Correspondent
THE EU and UK have introduced new AML and tax reporting rules for crypto exchanges, bringing digital assets into the global system for automatic tax information sharing.
From January 1, 2026, crypto platforms operating in the EU and UK must comply with the CARF (Crypto-Asset Reporting Framework), developed by the Organisation for Economic Co-operation and Development (OECD). The rules require platforms to automatically report users’ account details and transaction data to tax authorities.
CARF closes gaps in international tax reporting that previously allowed crypto assets to fall outside existing information exchange systems. Under the new rules, CASPs (crypto asset service providers), including exchanges, must collect and submit data on a routine basis.
Platforms must gather users’ identity information, account details and transaction records. They must then submit this data to domestic tax authorities. This system replaces reliance on case-by-case cooperation with investigators.
EU and UK crypto tax oversight
The UK joins 75 countries and jurisdictions that have committed to implementing CARF.
All 27 European Union member states also began collecting crypto asset data on January 1, 2026, under DAC8, the EU’s implementation of CARF. These countries plan to start exchanging information by September 30, 2027.
The UK has taxed crypto transactions since 2014. However, exchanges previously provided user data only when investigators requested it.
CARF changes this approach. Platforms must now automatically report all users’ accounts and transaction information.
Users may face penalties if they refuse to provide required identity or account information. Users may also face penalties if they deliberately conceal details that prevent reporting to HMRC.
In the UK, platforms that submit inaccurate, incomplete or unverified reports face fines of up to £300 ($346) per user. Authorities may impose further penalties for failures in due diligence, record keeping or timely reporting. The first reporting deadline is May 31, 2027.
HMRC, the UK’s tax body, estimates the framework will raise £315 million in unpaid taxes by April 2030. The UK has an estimated 6 to 7 million crypto users, representing around 12% of the adult population.
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