Label, a compliance software provider, and Sovos, a tax compliance company, have partnered to provide an end-to-end reporting solution for digital asset platforms preparing for the OECD’s Crypto-Asset Reporting Framework (CARF).

According to analysis from Label, digital asset exchanges, brokers and custodians face a growing reporting burden ahead of CARF taking effect. The framework will introduce new tax transparency requirements for digital asset firms from 2027, covering activity during the 2026 tax year. The partnership combines Label’s CARF compliance technology with Sovos’ wider tax reporting infrastructure, giving digital asset exchanges, brokers and custodians a way to manage digital asset and traditional reporting requirements within the same compliance environment.

CARF establishes a global framework for collecting and exchanging tax information relating to digital asset transactions. It requires digital asset platforms and other Virtual Asset Service Providers (VASPs) to collect, validate and report detailed information about customers and their transactions across participating jurisdictions.

The requirements cover activities including digital asset-to-fiat conversions, digital asset-to-digital asset transactions, staking rewards and certain retail payments. Firms must also complete customer due diligence, collect tax self-certifications and meet jurisdiction-specific reporting requirements.

For digital asset platforms, one of the challenges is bringing together transaction data from different asset classes and internal systems. Firms must also validate customer tax information and apply relevant foreign exchange rules when converting transaction values into fiat currencies for reporting.

CARF reporting adds another technical requirement through the OECD’s XML format. Reporting files must meet specific structural and data requirements, meaning errors can result in rejected submissions.

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