The European Union’s new crypto tax reporting framework focuses on enforceable measures, leaving DeFi untouched. 48 jurisdictions aim to implement the Crypto Asset Reporting Framework by 2029. DAC8 requires exchanges to collect user data by 2026, but DeFi remains outside the scope, creating compliance disparities in the industry.

The OECD’s Common Reporting Standard does not cover most crypto activity, prompting the development of the Crypto Asset Reporting Framework. DAC8 aligns with CARF, extending tax transparency obligations to crypto services. The EU’s move towards DAC8 reflects global adoption of CARF, signaling tighter tax scrutiny for crypto assets.

DeFi currently falls outside tax reporting rules due to AML challenges. FATF and OECD work closely on AML and tax standards, with only a few jurisdictions registering DeFi platforms as VASPs. DAC8 aims to standardize reporting for crypto businesses, potentially leading to broader obligations for the industry.

Tax authorities are closely monitoring AML developments in crypto, aiming to standardize reporting across jurisdictions. OECD and FATF cooperation may limit jurisdiction shopping for crypto services. As economies align tax and AML rules, DeFi’s exclusion from reporting may be temporary, as standards evolve.

Read more at Cointelegraph: EU’s DeFi Tax Gap Won’t Last Forever, Says Ex-OECD Official