Preparing for compliance with CRS 2.0, the OECD's updated Common Reporting Standard
The Common Reporting Standard (CRS), the OECD's global standard for automatically exchanging financial account information, has applied in over 120 jurisdictions since 2014. It's set by the OECD and G20 countries, with implementation monitored through the Global Forum on Transparency and Exchange of Information for Tax Purposes. New digital products, e-money, CBDCs, and crypto-linked investments, along with practical feedback from
participating jurisdictions, prompted the OECD's first comprehensive review of CRS. The resulting amendments were adopted in August 2022 and finalized in June 2023. The industry calls this update "CRS 2.0," one of the most significant rewrites to automatic exchange obligations since CRS began.
At its core, CRS 2.0 requires Financial Institutions to identify which of their account holders are tax resident outside the institution's home jurisdiction, and to do the same for any Controlling Persons behind entity account holders. This relies on self-certifications collected from customers, checked against other documentation the institution already holds. Once an account is confirmed as reportable, the Financial Institution reports specified
information, the account balance, income paid or credited, and, under CRS 2.0, additional detail such as account type and each Controlling Person's role, to its own domestic tax authority once a year. That authority then exchanges the information with the tax authority of the jurisdiction where the account holder actually resides.
CRS 2.0 closes two gaps: the rise of digital financial products that function like traditional accounts, and shortcomings in due diligence and data quality identified since 2014. Its main changes include:
All financial institutions currently reporting under CRS are impacted, including banks, investment firms, insurance companies, and other financial institutions. They must comply with CRS reporting requirements, including identifying and reporting financial accounts held by foreign tax residents.
Automatic Exchange of Information (AEOI) is the delivery mechanism that allows tax authorities in different jurisdictions to share financial account data on a regular schedule, rather than case by case on request. That sharing is governed by agreements between jurisdictions, most commonly the Multilateral Competent Authority Agreement (MCAA), which sets out what's exchanged, how, and by which authorities.
CRS 2.0 is the substantive content flowing through that pipeline: it tells Financial Institutions what to collect and report, while AEOI is the legal and technical channel moving that data from a Financial Institution's home tax authority to the authority where the account holder is actually resident.
CRS 2.0 and CARF were developed side by side but serve different purposes: CRS 2.0 tracks account holdings, while CARF tracks crypto-asset transactions themselves.
| CRS 2.0 | CARF | |
|---|---|---|
| Who reports | Financial Institutions | Crypto-Asset Service Providers |
| What's tracked | Account holdings and balances, now extended to e-money, CBDCs, and crypto-linked derivatives or funds | Individual crypto-asset transactions: fiat-to-crypto, crypto-to-crypto exchanges, and transfers |
| What falls outside its scope | Direct crypto-asset holdings, which are CARF's domain instead, aside from certain tokenized securities | CBDCs and specified e-money, which are CRS 2.0's domain instead, along with crypto-assets that aren't used for investment or payment |
| How overlap is avoided | An updated CRS XML schema with built-in checks to avoid double-counting holdings already captured under CARF | A new CARF XML schema, harmonized with CRS, backed by OECD guidance that aligns CASP onboarding and classification with CRS |
The amendments adopted by the OECD, known as CRS 2.0, entered into force on 1 January 2026 in most participating jurisdictions, alongside a separate Crypto-Asset Reporting Framework (CARF) covering crypto-asset transactions. Both regimes affect every Financial Institution already reporting under CRS, plus newly captured investment funds, trusts, and e-money or digital wallet providers, and since CARF and CRS 2.0 were developed as one OECD package, their rollout tracks the same schedule in most major jurisdictions.
Most CRS 2.0 risk sits in operational readiness, not legal interpretation. The immediate priorities are clear: close the gap between existing CRS processes and the amended scope and data fields, refresh self-certifications and controlling-person records across the back book, and migrate reporting systems to the new XML schema before validation failures surface at the point of greatest scrutiny, the tax authority's own portal.
The harder challenge is consistency at scale. CRS 2.0, CARF, DAC8, and Form 1099-DA are four distinct regimes with different schemas, scopes. Firms that address each regime in isolation end up rebuilding the same due-diligence and reporting logic repeatedly, and re-testing it every time a jurisdiction updates its rules. The firms best positioned for digital asset tax compliance are treating this as one data and controls challenge rather than four separate projects, which is exactly the gap a unified compliance platform is built to close.
E-book
With major regulations now in force, legacy tax compliance approaches fall short.
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