Tax Transparency Framework

Definition ∞ A Tax Transparency Framework refers to a system of regulations and reporting requirements designed to ensure that digital asset transactions are accurately declared for tax purposes. This framework aims to combat tax evasion and ensure fair revenue collection from the growing digital economy. It mandates information sharing between digital asset service providers and tax authorities. Such measures are crucial for integrating digital assets into traditional financial systems.
Context ∞ The implementation of a robust Tax Transparency Framework for digital assets is a pressing issue for governments globally, with significant implications for both individual investors and businesses. Recent news frequently covers proposals for standardized reporting rules, such as the Crypto-Asset Reporting Framework (CARF) by the OECD. The ongoing challenge is to create a system that is effective in capturing tax obligations without stifling innovation in the digital asset sector.