For much of crypto’s history, tax compliance depended largely on voluntary disclosure. That model is now being phased out.
Starting in 2026, crypto exchanges and crypto-asset service providers (CASPs) operating across major jurisdictions will be required to automatically report user identity and transaction data to tax authorities. The shift is anchored in the European Union’s DAC8 directive and the OECD’s Crypto-Asset Reporting Framework (CARF), both designed to align crypto markets more closely with traditional financial reporting systems.
As a result, tax transparency is moving from the edge of the crypto ecosystem to its core infrastructure.
Key Takeaway
From 2026, crypto exchanges and CASPs will be required to automatically report user data and transaction activity under DAC8 and OECD CARF rules, expanding global crypto tax visibility.
Reporting Rules Take Effect in 2026
The European Union’s DAC8 framework applies from January 1, 2026, following mandatory adoption by member states by the end of 2025, according to the European Commission. Importantly, 2026 will be the first reportable year, requiring platforms to collect and structure user data in a format suitable for tax authorities.
At the same time, the OECD’s CARF standard is being rolled out across participating jurisdictions, including the United Kingdom. The framework establishes a shared reporting structure that allows tax agencies to exchange crypto-related information across borders, as outlined by the OECD.
Together, the two initiatives represent the most coordinated global effort to date to integrate crypto markets into existing tax oversight regimes.
Who Must Comply
The reporting obligation applies broadly to entities that facilitate crypto activity on behalf of users.
Covered providers include:
- Centralized crypto exchanges
- Custodial wallet providers
- Platforms executing crypto trades, swaps, or transfers
- Certain non-EU providers that serve EU or UK residents
As clarified in the EU guidance, compliance depends less on where a platform is headquartered and more on where its users are based and which markets it serves.
What Data Exchanges Must Report
The scope of reporting extends beyond basic account information.
Under DAC8 and CARF-aligned rules, CASPs are expected to collect and report:
- User identification details
- Tax residency information
- Aggregated transaction values
- Reportable crypto disposals and transfers
Crucially, the data is prepared for automatic exchange between tax authorities, reducing reliance on individual self-reporting. According to a Financial Times report, regulators view this as a key step in closing long-standing crypto tax gaps.
How Crypto Tax Reporting Frameworks Compare
| Framework | Applies to | Reporting entities | Core reporting scope | Start date |
| DAC8 | European Union | CASPs serving EU users | User identity, tax residency, crypto transaction data | Jan 1, 2026 |
| OECD CARF | Participating countries | Reporting crypto service providers | Standardized crypto activity data for cross-border exchange | First reporting year 2026 |
| UK CARF rules | United Kingdom | UK-registered crypto providers | Annual user activity and residency reporting | Jan 1, 2026 |
UK implementation details are outlined in official guidance published by the UK government.
Why Tax Authorities are Acting Now
Crypto markets have expanded faster than existing tax infrastructure. As trading volumes grew, tax authorities struggled to reconcile declared gains with platform-level activity, particularly across borders.
DAC8 and CARF respond by shifting reporting obligations upstream. Instead of relying on individual disclosures, tax agencies receive standardized data directly from service providers. The OECD has also released technical guidance on how data will be transmitted between jurisdictions, reinforcing that implementation is moving beyond policy design into execution (OECD guidance).
“What is changing in 2026 is not the tax treatment of crypto, but the visibility. Once exchanges are required to report user activity automatically, tax authorities no longer have to rely on self-disclosure to understand crypto flows,” said a Europe-based digital assets tax policy advisor familiar with DAC8 and OECD CARF implementation.
What this Means for Crypto Investors
For market participants, the impact is structural rather than speculative.
First, activity on centralized exchanges will increasingly align with tax records, making inconsistencies easier to identify.
Second, tax residency will play a larger role. Users should expect exchanges to request updated residency confirmations as part of compliance procedures.
Third, cross-border crypto activity will face greater visibility, as information shared between authorities limits the ability to move activity between jurisdictions without detection.
How Exchanges Are Responding
Major platforms have already begun preparing for the transition. Efforts include expanded compliance teams, upgraded data systems, and reporting pipelines designed to meet jurisdiction-specific requirements.
In the UK, regulatory guidance outlines registration obligations and penalties for non-compliance, signaling that reporting failures may carry financial and operational consequences (UK Treasury guidance).
What Users Should Expect in 2025
Although formal reporting begins in 2026, 2025 serves as a transition year.
During this period, users may encounter:
- Increased requests for tax residency confirmation
- Expanded identity verification processes
- Clearer disclosures from platforms regarding tax reporting obligations
As a result, maintaining accurate records and understanding local tax responsibilities becomes increasingly important for active traders.
Transparency becomes structural
The move toward automatic crypto tax reporting marks a lasting change in how digital asset markets interact with regulators.
For governments, it delivers consistent visibility. For exchanges, it formalizes compliance as a core operational function. For users, it signals that crypto participation is now closely tied to standardized tax reporting, particularly in jurisdictions adopting DAC8 and CARF rules.
Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or investment advice. Readers should consult qualified professionals regarding their individual circumstances.