CRS 2.0 and crypto reporting

Draft legislation brings a broader regime into focus 6 min read

Treasury has released exposure draft legislation to update Australia's Common Reporting Standard (CRS), implement the Crypto-Asset Reporting Framework (CARF) and introduce a domestic crypto reporting regime (DCRR).

Reporting Financial Institutions should already be updating their customer onboarding, due diligence and reporting systems ahead of 1 January 2027 to accommodate the amended CRS.

For crypto and digital asset service providers, the threshold question is whether the expanded definitions bring them (or additional products) within the regimes. If so, they should also progress implementation ahead of 1 January 2027 (1 July 2027 for the DCRR). 

In this Insight, we explain the key proposed CRS and crypto reporting changes and identify practical steps to consider now.

Key takeaways

• Reporting Financial Institutions should proceed to implement the CRS updates. Reporting Financial Institutions should assess the additional data and due diligence requirements under the amended CRS, including for existing financial accounts, and finalise implementation. Separately, reports due by 31 July 2027 will need to accommodate new fields.
• Crypto-asset service providers should implement the CARF and the DCRR, if within scope. Crypto-asset service providers should assess whether they will be within scope of the CARF or the DCRR, and if so, implement systems and processes to enable compliance.
• 2027 commencement despite pending legislation and rules. Entities should monitor the progress of the draft legislation and subordinate rules, and note the impending start date of 1 January 2027 (1 July 2027 for the DCRR).  
• Dedicate appropriate resources to implementation and compliance to avoid penalties. Entities should treat this as a coordinated tax, operations and technology project which will take significant time to fully implement. There are various challenges to implementation and compliance, and significant penalties and remediation costs could be incurred for defective implementation.

What has been released?

The CRS is the international framework under which banks, custodial institutions, investment entities and specified insurance companies collect and report financial account information concerning foreign residents.¹

On 15 October 2026, Treasury released an exposure draft of the Treasury Laws Amendment Bill 2026: Tax Information Reporting and explanatory materials.² The draft legislation:

• updates the CRS as implemented in Australia to the amended version released by the OECD in 2023 ('CRS 2.0');
• provides a framework to introduce the OECD CARF into Australian law; and
• introduces a DCRR for crypto transactions involving Australian residents.

Amended CRS (CRS 2.0)

The amended OECD standard requires additional information to be reported about reportable accounts, including:

• whether a valid self-certification has been provided by the account holder and relevant controlling persons;
• whether an account is jointly held and the number of joint account holders;
• the roles through which controlling persons (eg beneficial owners) and certain equity interest holders hold their interests, subject to certain transitional rules; and
• the account type (eg depository account) and whether it is a pre-existing or new account.

To complement the CARF (below), the amended OECD standard expands the definition of a depository institution to include an entity holding specified electronic money products or central bank digital currencies for customers, which have particular definitions and exclusions. The investment entity and financial asset definitions will also change to address certain indirect crypto exposures.

Under the amended standard, reliance on anti-money laundering and know your customer (AML/KYC) information to identify controlling persons of new entity accounts is tied to procedures consistent with the 2012 Financial Action Task Force (FATF) Recommendations, or substantially similar procedures.

Certain other changes and exclusion categories apply.³

New due diligence penalties

The draft legislation proposes to amend the CRS due diligence penalty regime in the Taxation Administration Act 1953 (Cth). It proposes to complement the existing penalty for failing to collect a self-certification with penalties for:

• failure to validate a self-certification including by confirming its reasonableness; and
• failure to respond to a change in circumstances that makes a self-certification or other information incorrect or unreliable,

within the timeframes required by the CRS.⁴

The practical effect of these new penalties remains to be seen, given that many due diligence failures would prevent the institution from reporting correctly in any event. The expanded penalty regime does however address OECD comments that countries should enact comprehensive due diligence penalties.

The expanded penalty would apply to requirements falling due on or after the later of 1 January 2027 and commencement, including those relating to existing accounts.

XML schema amendments apply from 1 January 2027

Separately from the proposed legislative amendments, the Australian Taxation Office (ATO) has confirmed that CRS XML Schema v3.0 takes effect on 1 January 2027. For reports due by 31 July 2027 (ie ordinarily relating to the 2026 calendar year), institutions must either report the new data elements, use the permitted transitional ‘not reported’ codes, or combine the two approaches.⁵

Crypto-asset reporting: CARF and DCRR 

CARF

The CARF is the OECD’s tax transparency framework designed for crypto-assets but based heavily on the CRS.

It requires in-scope crypto-asset service providers to identify users and their foreign tax residence, undertake due diligence and report information about relevant crypto-asset transactions to the local tax authority for exchange with partner jurisdictions.

The CARF focuses on crypto-asset transactions, including exchanges between crypto-assets and fiat currency and transfers of crypto-assets under a CRS-like collection, due diligence and reporting regime.⁶

The exposure draft establishes a framework to prescribe international cooperative reporting frameworks, with the detailed CARF requirements (expected to be closely aligned to the OECD model) to follow in subordinate rules. The ATO expects Australia’s first CARF information exchanges in 2028.

DCRR

In recognition of the value of tax transparency for crypto-asset transactions and users, the draft legislation also introduces a domestic crypto reporting regime applying to Australian residents. This has a separate proposed start date of 1 July 2027.

Under the DCRR, broadly, an entity that provides a registrable virtual asset service within the meaning of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) is required to provide information to the Commissioner of Taxation about a transaction that:

• occurs in the course of the entity providing that service to an Australian resident user at any time during the applicable reporting period; and
• involves an exchange or transfer of a virtual asset (within the meaning of the AML/CTF Act) by or for the user, or on the user’s instructions.⁷

Aspects of the DCRR depend on the issue of subordinate rules.

Industry response

In its 28 October 2026 submission to Treasury, the Australian Banking Association (ABA) argues that banks require additional implementation time, suggesting 1 January 2029 as a start date.⁸ The ABA also seeks a safe harbour from the expanded due diligence penalty for institutions acting reasonably and consistently with an implementation plan provided to the ATO.

The submission calls for additional ATO guidance and reporting specifications before mandatory implementation. The ABA highlights differences between AML/CTF beneficial ownership and CRS controlling person requirements, particularly for trusts, and seeks clarity on when institutions can rely on AML/KYC procedures. For CARF and the DCRR, the ABA seeks clarification of various matters including potential overlapping reporting issues.

It is yet to be seen how the Government will respond to these submissions.

Please contact our team if you would like to discuss how the proposed reforms may affect your business.