Crypto asset reporting is moving into the mainstream tax net

Australia’s tax transparency framework is about to undergo a significant expansion. The exposure draft Treasury Laws Amendment Bill 2026: Tax Information Reporting introduces new crypto-asset reporting obligations, establishes a flexible framework for future international tax information exchanges, and updates Australia’s implementation of the Common Reporting Standard (CRS) to align with recent Organisation for Economic Co-operation and Development (OECD) developments.

These tax measures form part of a broader move to bring crypto-asset activities within Australia’s mainstream regulatory frameworks. They sit alongside ASIC’s proposed implementation standards and guidance in Consultation Paper 392 (CP 392) for digital asset platforms (DAPs) and tokenised custody platforms (TCPs).

While CP 392 focuses on AFS licensing, custody, transaction and settlement standards, market integrity, disclosure and financial resources, the proposed tax reforms focus on improving the Australian Taxation Office (ATO)’s domestic and cross-border visibility of crypto-asset transactions. The regimes are separate but complementary, and affected platform operators should consider their combined impact on their business.

What has changed with crypto reporting?

The exposure draft introduces three key reforms:

1. New framework for international tax information reporting

The proposed legislation creates a mechanism allowing the Governor-General to implement international cooperative reporting frameworks through regulations and ministerial rules. These frameworks allow for development of reporting requirements that are designed to support Australia’s participation in OECD-led and other bilateral or multilateral tax information exchange arrangements.

Importantly, this framework is intended to facilitate Australia’s adoption of the OECD’s Crypto-Asset Reporting Framework (CARF), which aims to enable the automatic exchange of crypto-related tax information between participating jurisdictions. Any framework introduced will not impact the function of existing tax information sharing regimes such as CRS and country-by-country reporting.

Reporting Crypto-Asset Service Providers will be required to collect and report information on relevant transactions, with the first collection period expected to cover the 2027 calendar year and the first exchange of information to commence in 2028.

2. Introduction of a Domestic Crypto Reporting Regime

The Bill introduces a dedicated Domestic Crypto Reporting Regime (DCRR) requiring providers of registrable virtual asset services to report information on transactions undertaken by Australian tax residents.

The regime applies to transactions involving the exchange or transfer of virtual assets, including cryptocurrency and non-fungible tokens (NFTs). It captures a broad range of virtual asset service providers (VASPs), including businesses involved in:

• Exchanging crypto-assets for fiat currency
• Exchanging one crypto-asset for another
• Custody and safekeeping services
• Facilitating transfers of virtual assets
• Certain financial services connected with crypto-asset offerings.

Reporting is intended to occur quarterly from 1 July 2027, although the Commissioner may specify alternative reporting periods. Reported information is expected to include customer identification details (i.e. name, address, bank details, ABN, and entity type), transaction values expressed in Australian dollars, transaction dates and transaction identifiers.

3. Significant updates to the Common Reporting Standard

Australia’s CRS rules will be updated to reflect OECD amendments adopted in 2022 and incorporated into OECD guidance in 2023. These changes broaden the scope of assets and institutions captured by the regime and strengthen due diligence obligations.

Key changes include:

• Bringing certain electronic money products and central bank digital currencies within CRS reporting
• Extending coverage to indirect investments and financial products linked to crypto-assets
• Expanding the definition of investment entities that invest in or manage crypto-assets
• Increasing reporting data requirements
• Strengthening self-certification and due diligence requirements
• Removing scholarship plans from the list of excluded accounts.

The revised CRS is proposed to apply from 1 January 2027.

How the new crypto tax reporting obligations will affect investors and service providers

For crypto investors, the proposed changes represent a material increase in the information available to the ATO. Historically, the ATO has relied heavily on targeted data-matching programs and information requests to certain providers. The new framework moves towards systematic and standardised reporting, both domestically and internationally.

For crypto service providers, the compliance burden is likely to increase significantly. Businesses will need processes capable of identifying Australian tax residents, collecting the required customer information, validating data quality and generating reports that comply with prescribed requirements. Existing anti-money laundering/counter-terrorism financing (AML/CTF) processes may provide a foundation, but additional tax-specific data collection and governance measures will likely be required.

Given the broad nature of the virtual asset services included within the scope of DCRR the practical significance of the new regime has potential to extend well beyond crypto exchanges and to all manner of connected entities that provide ancillary services in the digital asset sector.

Traditional financial institutions should not assume these reforms are limited to the digital asset sector. The CRS amendments expand reporting obligations to newer forms of digital financial products and strengthen due diligence requirements. Institutions that already comply with CRS obligations may need to review onboarding procedures, self-certification processes and account classification methodologies.

The strengthened due diligence regime is particularly noteworthy. Reporting financial institutions are liable for administrative penalty of one unit at $364 if they fail to obtain, validate or appropriately refresh self-certification information for each breach within prescribed timeframes.

BDO’s perspective

In our view, these reforms reflect a broader global trend rather than a standalone Australian initiative.

Tax authorities worldwide are focused on reducing information gaps associated with digital assets and ensuring that emerging financial products are subject to the same transparency standards as traditional investments. Australia’s implementation of CARF and the CRS updates demonstrates a commitment to keeping pace with evolving OECD standards and increasing international information sharing.

While much attention will focus on crypto exchanges and digital asset investors, the broader impact may be felt across financial services, fintech, custody providers and organisations offering products that resemble traditional financial accounts in digital form. Businesses that defer implementation planning until final rules are issued may face compressed timelines and increased compliance costs.

Practical steps to prepare for Australia's new crypto reporting obligations

Although the legislation remains in exposure draft form, affected organisations should begin preparing for implementation.

Key actions include:

• Assessing whether existing products, services or business activities fall within the scope of the proposed reporting regimes
• Reviewing customer onboarding and tax residency identification procedures
• Identifying data gaps that could prevent compliance with future reporting requirements
• Evaluating whether existing AML/CTF and customer due diligence systems can support the additional tax reporting obligations
• Reviewing whether they fall within the definition of a financial institution under the CRS regime as a result of the proposed changes
• Reviewing CRS governance frameworks and self-certification processes
• Considering the operational and technology investments required before the proposed 2027 commencement dates.

How BDO can help

The proposed reforms represent a significant expansion of Australia’s tax transparency framework and will require many organisations to reassess existing compliance processes. BDO can assist businesses in understanding the scope of the new requirements, assessing readiness, identifying implementation gaps and developing practical compliance frameworks that align with evolving domestic and international reporting obligations.

Contact our tax team for support.