On 27 November 2025, the Cayman Islands published two pivotal regulations aimed at improving global tax transparency: the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS). Effective 1 January 2026, these regulations are designed to combat tax evasion and the misuse of virtual assets.

The CARF introduces automatic exchange of information on crypto-asset transactions, covering payment tokens (e.g., Bitcoin, stablecoins), utility tokens, certain non-fungible tokens (NFTs), and security tokens. Meanwhile, the CRS amendments expand its scope to include electronic money products, central bank digital currencies, and indirect crypto-asset investments. Entities subject to these frameworks will begin reporting 2026 data in 2027, marking a significant step in aligning the Cayman Islands with international tax compliance standards.

The two regulations, Tax Information Authority (International Tax Compliance) (Crypto-Asset Reporting Framework) Regulations, 2025 and Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations, 2025 introduce significant updates to the Cayman Islands' tax compliance framework. Below is a summary of key provisions:

1. Crypto-Asset Reporting Framework Regulations, 2025

This regulation establishes a comprehensive framework for the automatic exchange of information related to crypto-assets, aligning with international standards set by the Organisation for Economic

Co-Operation and Development (OECD). Key highlights include:

Scope and definitions

• Cayman reporting crypto-asset service providers: Entities or individuals providing crypto-asset exchange or transfer services in the Cayman Islands for or on behalf of customers, including making available a trading platform.
• Relevant crypto-assets: Digital assets excluding central bank digital currencies and specified electronic money products.
• Reportable users: Crypto-asset users or controlling persons residing in jurisdictions with which the Cayman Islands has reporting agreements.

Reporting and due diligence obligations

• Providers must establish written policies to identify users' tax residency(ies) and comply with due diligence procedures, and must keep records of these written policies and procedures.
• Self-certifications must be collected from users to determine their tax residency(ies) by 1 January 2027 and (from 2 January 2027) prior to or upon establishing a relationship with a user.
• Annual returns must be submitted by 30 June 2026, detailing reportable transactions including acquisitions, disposals and transfers of crypto-assets. If there are no reportable transactions or the provider has submitted a return in another jurisdiction, the provider must submit a nil return.

Compliance and monitoring

• The Tax Information Authority (TIA) is empowered to monitor compliance, request records, and impose penalties for non-compliance.
• Providers must retain records for at least six years and ensure the accuracy and adequacy of submitted information.

Offences and penalties

• Offences include false self-certifications, tampering with information, and hindering the Authority's functions.
• Penalties range from fixed fines to daily penalties for ongoing contraventions, with a maximum cap of $50,000.

2. Common Reporting Standard (Amendment) Regulations, 2025

This amendment updates the existing CRS framework to enhance the reporting and due diligence requirements for financial institutions. The amendments take effect on 1 January 2026, with transitional provisions for pre-existing accounts and reporting obligations. Key amendments include:

Reporting and compliance

• Financial institutions must submit annual returns and compliance forms by 30 June of each year, detailing reportable accounts and transactions during the previous calendar year.
• Self-certifications must include comprehensive information, such as tax residency, TINs, and account details, for both individual and entity account holders.

Monitoring and enforcement

• The TIA is authorised to verify the classification of entities and ensure the adequacy of reported information.
• Institutions must retain records for six years and correct any inaccuracies identified by the TIA.

Penalties and appeals

• Enhanced procedures for imposing penalties, including breach notices and penalty notices.
• Automatic stay on enforcement of penalties during appeals, ensuring fairness in the compliance process.

Definitions and scope

• Expanded definitions for terms such as "accurate," "adequate," and "current" to ensure clarity in reporting obligations.
• Inclusion of a definition for “change of circumstances”.
• Inclusion of crypto-assets and specified electronic money products within the CRS framework.

Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations, 2025 can be access here

Tax Information Authority (International Tax Compliance) (Crypto-Asset Reporting Framework) Regulations, 2025 can be found here

The press release can be accessed here