Regulators, tax leaders and industry practitioners gathered in New York on 4 February for the 2026 Investment Management Tax Reporting and Withholding Conference, where digital asset reporting, FATCA/CRS enforcement and treaty developments dominated the agenda.
Sponsored by Comply Exchange, the event highlighted how regulatory expectations are hardening globally and why tax operations teams must rethink systems, governance and controls.
One of the most significant developments discussed was the OECD’s release of CRS 2.0. The updated Common Reporting Standard introduces a revised XML schema designed to enhance data quality and align more closely with the Crypto-Asset Reporting Framework (CARF).
New reporting elements include expanded account type classifications, more detailed joint account information and clearer identification of controlling-person roles.
While CRS 2.0 becomes effective on 1 January 2026, the first exchange of information will not occur until 2027 for the 2026 reporting year. However, speakers emphasised that firms cannot afford to treat this as a simple technical adjustment. Investment managers are expected to conduct detailed gap analyses, revise onboarding and due diligence processes, upgrade systems to capture additional data fields and reinforce governance and training.
CARF developments were also a major focus. With 48 jurisdictions set to begin exchanges by 2027 and a further 27 by 2028, global adoption is accelerating. The U.S. is anticipated to follow by 2029. CARF introduces transaction-level reporting for digital assets and requires more comprehensive self-certifications, particularly around controlling persons and partnership equity interests. Asset managers will need to ensure systems can accurately capture and report digital asset transactions, a capability many traditional infrastructures were not designed to handle.
Enforcement trends added further urgency. Regulatory fines are increasing in several regions, including the UAE, where public disclosure of enforcement actions is being used as a deterrent, Comply Exchange stated. CRS audits are intensifying in Luxembourg, Canada and the British Virgin Islands, with authorities scrutinising data quality, governance frameworks and due diligence standards.
In the U.S., the IRS Large Business and International (LB&I) Division has stepped up campaigns targeting Form 1042/1042-S reporting, non-resident alien treaty exemptions and financial service entities engaged in U.S. trade or business. Meanwhile, OECD Global Forum peer reviews continue to assess jurisdictions’ CRS compliance, with poor ratings carrying reputational and financing consequences.
Across sessions, one theme persisted: regulatory change is accelerating, and manual processes are unlikely to withstand the scrutiny ahead. As compliance expectations expand across both traditional and digital assets, firms must combine robust data governance with automation to reduce operational risk and absorb reform more effectively.
For more insights from the discussions, read the full story here.
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