In a move towards enhancing international cooperation in the battle against tax fraud and evasion, Portugal, along with 47 other jurisdictions, has pledged to commence the automatic exchange of information on crypto-assets starting in 2027. This commitment aligns with the globally recognized standard established by the OECD, known as the Crypto-Asset Reporting Framework (CARF).
Global Collaboration Against Tax Evasion:
The joint commitment of 48 jurisdictions, including Portugal, signifies a pivotal moment in the collaborative effort to address the challenges posed by the escalating use of crypto-assets for transactions and investments. The initiative aims to empower tax administrations with automatic access to information regarding income generated from crypto-asset transactions. This proactive approach is instrumental in meeting the evolving demands of the financial landscape and contributes to greater efficiency and tax equity.
Adoption of International Standards:
The announcement also emphasizes the adoption of changes to the Common Reporting Standard (CRS) by 2027. The CRS, a global standard for the automatic exchange of information on financial accounts, reflects the commitment of these jurisdictions to stay abreast of international developments in the realm of financial transparency and information exchange.
European Union Directive (DAC 8):
Within the European Union, the recent adoption of Directive (DAC 8) further reinforces the commitment to combat tax fraud. This directive amends Directive 2011/16/EU on administrative cooperation in the field of taxation. Notably, it extends the scope of information exchange, compelling crypto-asset service providers to communicate transaction details to EU member states. This information will subsequently undergo automatic exchange among member states, providing an additional layer of scrutiny and collaboration.
Implications for Portugal:
For Portugal, this commitment represents a significant stride in fortifying its arsenal against tax fraud and evasion. The automatic exchange of information on crypto-assets aligns with the country’s dedication to ensuring a fair and equitable distribution of the tax burden. The implementation of these international standards reaffirms Portugal’s commitment to upholding the highest standards of financial transparency and compliance with global norms.
In conclusion, the decision by Portugal and 47 other jurisdictions to engage in the automatic exchange of information on crypto-assets underscores a collective commitment to global financial integrity. As the international community strives to keep pace with the dynamic nature of financial transactions, such initiatives serve as crucial instruments in fostering a fairer and more transparent global tax landscape. Portugal’s participation in this initiative reflects its proactive approach to tackling emerging challenges in the realm of taxation, contributing to a more secure and equitable financial future.
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Written by Rodolfo José Santos