Starting in 2026, the UK will mandate the reporting of domestic transactions involving Crypto Assets, expanding the applicability of CARF.

Source: TokenPost Original Title: UK to mandate domestic cryptocurrency transaction reporting from 2026…Expansion of CARF application Original Link: The UK government has announced that starting in 2026, it will require domestic cryptocurrency platforms to mandatorily report all transactions of domestic users. This is a significant expansion of the scope of the “Crypto Asset Reporting Framework (CARF)” designed by the Organisation for Economic Co-operation and Development (OECD), aimed at enhancing global tax transparency.

After the implementation of this measure, the UK tax authority HMRC will be able to automatically collect data on domestic and foreign cryptocurrency transactions for the first time. The traditional CARF mainly focuses on cross-border cryptocurrency transactions, but the UK’s move expands this to domestic transactions, aiming to prevent cryptocurrencies from becoming a “tax evasion tool” from the source.

CARF requires cryptocurrency service providers to fulfill user identity verification, transaction reporting, and annual due diligence obligations. Previously, domestic transactions were excluded from the reporting scope, but HMRC has now included them, bringing cryptocurrency to the level of transparency of traditional financial accounts. The government stated that this move is to address concerns that cryptocurrency could become a regulatory blind spot for the international common reporting standard ( CRS ).

HMRC emphasizes that this scheme not only simplifies the reporting process for cryptocurrency businesses but also helps achieve more refined tax regulation. At the same time, the UK government has proposed a “no gain, no loss(” tax system, which defers the capital gains tax on profits for DeFi users before the actual sale of tokens, and the industry has welcomed this reform.

Globally, actions to strengthen cryptocurrency tax systems are continuously advancing. The South Korean National Tax Service announced that it would seize cold wallet assets and conduct home searches of hardware wallets for tax evaders who conceal cryptocurrency. Spain has proposed a tax rate of up to 47% for high-income cryptocurrency earnings and a uniform tax rate of 30% for assets held by companies.

As the first international information sharing based on CARF in 2027 approaches, cryptocurrencies are struggling to maintain their status as a “tax haven”. The proactive responses from various countries indicate that the process of cryptocurrencies entering the mainstream financial system is accelerating.

Key Interpretation

The UK's move reflects that major economies are advancing regulations for cryptocurrencies on par with traditional financial assets, and the expansion of domestic reporting obligations marks a new phase of tax transparency for cryptocurrencies.

Investors Need to Know

After cross-border and domestic transactions are included in the regulatory framework, global trading platforms need to upgrade their reporting systems, and individual investors should also pay attention to the transparent management of transaction records.

Terminology Explanation

• CARF: An international automatic exchange framework for cryptocurrency trading information designed by the OECD, used for sharing cross-border cryptocurrency tax information.
• No Income - No Loss Tax: A tax deferral method that postpones the assessment of capital gains tax when the asset has not been disposed of.
• CRS: The Common Reporting Standard applicable to international tax information reporting for traditional financial accounts.