The global tax environment is in flux, especially for firms dealing with digital assets. From delays in U.S. reporting requirements to FATCA and treaty upheaval, changes are reshaping operational risk and compliance frameworks. ComplyExchange has unpacked these developments – and what they mean for tax operations – in greater detail.
In the U.S., regulatory uncertainty continues to cloud digital asset reporting. While the IRS finalised broker reporting rules in July 2024 for transactions involving U.S. customers, broader implementation of the OECD’s Crypto-Asset Reporting Framework (CARF) has been disrupted following a December repeal of rules covering decentralised transactions. U.S. participation in CARF remains unclear, even as other jurisdictions prepare to launch by January 2026.
The U.S. is also re-evaluating its approach to retaliatory tax policy. Under IRC Section 891, withholding rates could be doubled if foreign countries impose discriminatory tax regimes targeting U.S. firms. The proposed Defending American Jobs and Investment Act (DAJI) would further raise annual withholding rates on payments to residents of countries with extraterritorial tax regimes—posing significant challenges for withholding agents and global structures.
Tax treaties are shifting rapidly. The U.S.-Hungary treaty was terminated at the start of 2024, while treaties with Russia and Belarus are set to be suspended. At the same time, a new agreement with Chile reduces withholding rates, and draft legislation for a statutory treaty with Taiwan is underway. Switzerland is also preparing to transition to a FATCA Model 1 IGA in 2027.
IRS reporting frameworks are being updated. Form 1099-DA, effective in 2025, applies to digital asset custodians, though non-custodial platforms remain outside its scope. ETFs tied to digital assets, hard forks, and new 1099 categories are adding complexity.
Form 1042-S changes for 2025 include new codes, checkboxes, and emphasis on Form 15397 for extension requests. IRS Notices 2024-26 and 2024-78 extend filing relief and FATCA IGA TIN relief for those demonstrating good-faith compliance.
Globally, FATCA, CRS and AEOI enforcement is intensifying. Authorities are increasing audits and requiring more rigorous documentation—especially around TINs, GIINs, and nil filings. FATCA registration now also demands verification through Login.gov or ID.me.
The QI agreement now mandates public QI-EIN disclosure, with clarified nominee and substitute dividend rules shifting more responsibility downstream.
Read the full blog from ComplyExchange here.
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