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 implement discriminatory tax regimes targeting U.S. firms.
Additionally, the proposed Defending American Jobs and Investment Act (DAJI) would impose steep annual withholding increases on cross-border payments involving jurisdictions with extraterritorial tax rules. The implications for withholding agents and multinational structures are significant.
Tax treaty developments are unfolding rapidly. The U.S.-Hungary treaty was terminated at the start of 2024, while treaties with Russia and Belarus are suspended later this year. Conversely, a new agreement with Chile lowers withholding rates, and draft legislation for a “statutory treaty” with Taiwan is in progress. Meanwhile, Switzerland will move to a FATCA Model 1 IGA in 2027, streamlining reporting requirements.
IRS reporting requirements are also evolving. The newly finalised Form 1099-DA, effective in 2025, will apply to digital asset custodians—but not decentralised platforms, which remain outside the current scope. Complexities around digital asset-based ETFs, hard forks, and payment reporting under 1099-B or 1099-DA are also creating new challenges.
Changes to Form 1042-S for 2025 include new income and status codes, expanded checkbox options, and an emphasis on using Form 15397 for extension requests. IRS Notices 2024-26 and 2024-78 extend paper filing relief and FATCA IGA TIN relief, but only for entities making demonstrable good-faith compliance efforts.
Enforcement of FATCA, CRS and AEOI standards is ramping up globally. Regulators are increasing desk audits and demanding more rigorous evidence of compliance, particularly in areas like missing TINs, nil filings, and GIIN reporting. U.S. FATCA registration now requires identity verification via Login.gov or ID.me.
In the context of QI, WP and WT regimes, entities are now required to consent to public disclosure of QI-EINs under the updated agreement. Reporting responsibilities for nominee accounts and substitute dividends have also been clarified, shifting more liability downstream.
Read the full blog from ComplyExchange here.
Copyright © 2025 RegTech Analyst
Copyright © 2018 RegTech Analyst
