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OECD Crypto Reporting Framework & Indian Financial Landscape


The Organization for Economic Co-operation and Development (OECD) is an inter-governmental organization founded in 1961 with the objective of, “improving economic performance and creating jobs to fostering strong education and fighting international tax evasion.”

In April 2021, the G20 mandated OECD to establish a system that provides for the automatic exchange of tax-relevant information on crypto-assets. Then, in August 2022, the Crypto-Asset Reporting Framework was developed by OECD to enhance the visibility of tax administrations over tax-relevant transactions within their jurisdictions.

The OECD is also currently in the process of introducing an implementation package consisting of a framework of bilateral or multilateral agreements or arrangements for the automatic exchange of information.


The rules of the Crypto-Asset Reporting Framework of the OECD are divided into three sections and broadly cover the following points:

Crypto-Asset Service Provider- Reporting Obligations

Reporting and due diligence requirements are to be followed for all Relevant Transactions[1] effectuated through a branch based in any jurisdiction.

A reporting crypto-asset service provider[2] is subject to reporting and due diligence requirements in its respective jurisdiction under the following conditions:

•If it is a resident in the jurisdiction for tax purposes or carries any other tax obligations; or

•is incorporated under the laws of the jurisdiction or has a legal personality; or

•it has managed from the jurisdiction or has a regular place of business in the jurisdiction.

It would be pertinent to note that the reporting and due diligence requirements which are to be followed for all relevant transactions would certainly be difficult to implement. Further, ‘branch’ assumes physical presence however most digital and server locations may be better guides of locus.

Reporting Requirements

The following three types of transactions are Relevant Transactions that are reportable under the CARF:

•exchanges between Relevant Crypto- Assets and Fiat Currencies;

•exchanges between one or more forms of Relevant Crypto-Assets; and

•Transfers(including Reportable Retail Payment Transactions) of Relevant Crypto-Assets.

Crypto-asset service provider must report the following information with respect to its reportable users[3] for the relevant reporting period[4]:

  1. Name, address, jurisdiction(s) of residence, TIN(s) and date and place of birth (in the case of an individual) of each reportable user,

  2. Name, address and identifying number (if any) of the reporting crypto-asset service provider,

  3. For each type of relevant crypto-asset[5] with respect to which it has effectuated relevant transactions during the reporting period, it must report the aggregate gross amount paid, the aggregate number of units and the number of relevant transactions in respect of acquisitions and disposal against fiat currency[6] or other crypto-assets.

Reporting Requirements- Exceptions

The term Relevant Crypto excludes from reporting requirements three categories of Crypto-Assets that pose limited tax compliance risks. They are:

Crypto-Assets which the Reporting Crypto-Asset Service Provider has adequately determined cannot be used for payment or investment purposes.

This exclusion builds on the scope of the virtual asset definition of the Financial Action Task Force. ('FATF')

Central Bank Digital Currencies, representing a claim in Fiat Currency on an issuing Central Bank, or monetary authority, which function is similar to money held in a traditional bank account.

•Specified Electronic Money Products that represent a single Fiat Currency and are redeemable at any time in the same Fiat Currency at par value as a regulatory matter.

Due Diligence Procedures

Individual Crypto Asset Users ---------Requirements for validity of self-certifications

Entity Crypto Asset Users ---------------General Due Diligence Requirements

Due-diligence procedures for individual crypto asset users

Self-certification: Through AML/KYC procedures, the reporting crypto asset service provider can obtain a self-certification that enables it to determine the individual crypto-asset user’s residence(s) for tax purposes and other documentation must also be obtained to confirm the reasonableness of such information.

Due-diligence procedures for entity crypto asset users

● Through self-certification, the reporting crypto asset service provider must obtain information about the entity’s tax jurisdiction and whether such jurisdiction is a reportable jurisdiction or not. This helps in determining whether the entity is a reportable user or not.

● The reporting crypto asset service provider then needs to determine whether the entity has any controlling persons who are reportable users. The term “Controlling Persons” means the natural persons who exercise control over an entity. The determination of the existence of any Controlling Persons is to be done by AML/KYC procedures that are consistent with the 2012 FATF recommendations and the determination of whether the controlling persons are reportable users or not is to be done by the same self-certification procedure described above.

[A self-certification is valid only if it is signed or otherwise positively affirmed by the Individual Crypto-Asset User or Controlling Person. The self-certification must also contain the full name, residential address, the jurisdiction of residence for tax purposes, and date of birth of the Individual Crypto-Asset User or Controlling Person. The framework has also provided guidelines on testing the reasonableness of self-certification. For example, if there are conflicting inputs about any of the Entity User’s details, then the self-certification is quite evidently, unreliable and inaccurate. However, if there is a reasonable explanation for the discrepancy, there would be no need to question the genuineness of the self-certification. For instance, if the documentation obtained from the User Entity discloses the place of incorporation of the entity and that differs from the tax jurisdiction of the entity by reason of the place of management of the entity being in that jurisdiction, the self-certification passes the reasonableness test.]

[Self-certification can also be obtained by the reporting crypto asset service provider from an agent that may retain the documentation as part of an information system.]

If a reporting crypto asset service provider acquires the business of another reporting crypto asset service provider that has fulfilled all its due diligence requirements, it may rely on the predecessor entity’s results of due diligence processes carried on for an individual crypto asset user. Unless it has reason to believe that the information obtained by the predecessor was inaccurate or insufficient.


With the presidency of G20 being with India, and RBI in the past have highlighted the importance of a global framework of crypto-currency reporting, the OECD framework will be of particular significance to India. In fact, just seven months ago, India introduced taxes on Virtual Digital Assets (VDAs) during the budget session of the Union Parliament.

While the framework lays the basic groundwork for Reporting of Crypto-Assets by establishing logical and comprehensive guidelines, what would be of greater importance than the technicalities of the reporting procedure is the international consensus. However, it can not be ignored that the guidelines may go against the philosophy of a group of crypto-users who want anonymity.

Convincing governments of member states, their Finance Ministries and bureaucrats to align with the OECD Framework or to introduce modified guidelines on similar lines to that of this framework and implementing them in their home states will prove to be the OECD’s greatest challenge. Having a flexible mechanism to introduce amendments so that the framework can evolve with time will also prove to be a major challenge as consensus would have to be gained for every proposed amendment which can prove to be a time-consuming process that would risk rendering the framework obsolete, by the time, a consensus is even organized.

Moreover, establishing infrastructure that is sophisticated enough to be able to transmit mammoth volumes of information exchanges for tax-relevant transactions will require an enormous amount of funding along with the necessary know-how and technology.

To find the OECD Crypto-Asset Reporting Framework and Amendments to the Common Reporting Standard, click here.

[1] Relevant transactions mean any exchange transaction and transfer of relevant crypto assets. [2]Any entity that provides services effectuating exchange transactions for or on behalf of customers.

[3] Reportable users mean a Crypto-Asset User that is a Reportable Person. [4] In determining what is meant by “appropriate reporting period”, reference must be made to the meaning that the term has at that time under each jurisdiction’s reporting rules. [5] Crypto-Assets that give rise to reporting on Relevant Transactions. [6] Fiat money is a government-issued currency that is not backed by a commodity such as gold. Fiat money gives central banks greater control over the economy because they can control how much money is printed. Most modern paper currencies, such as the U.S. dollar, are fiat currencies.


The note is prepared for knowledge dissemination and does not constitute legal, financial or commercial advice.

AK & Partners or its associates are not responsible for any action taken based on its contents.

For further queries or details you may contact:

Mr Anuroop Omkar,

Partner, AK & Partners


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