Hong Kong's Legislative Council passed a new crypto-asset tax reporting law on November 4, implementing the OECD's Crypto-Asset Reporting Framework (CARF) and requiring relevant digital asset service providers to begin collecting transaction data in 2027. Automatic exchanges of crypto tax information with partner jurisdictions are scheduled to start in 2028.

The measure is detailed in the Hong Kong government's official announcement. It also amends the city's Common Reporting Standard (CRS), with updated rules taking effect in 2028 and information exchanges under the revised regime beginning in 2029.

New Reporting Duties for Crypto Service Providers

The law implements two standards developed by the Organisation for Economic Co-operation and Development. The first is CARF, which the OECD published in 2023 as digital asset markets expanded. The framework provides for automatic exchanges of tax information on crypto-asset transactions.

Under CARF, crypto-asset service providers must collect the information specified by the framework from 2027. Hong Kong's Inland Revenue Department will use that data to conduct annual exchanges with partner jurisdictions starting in 2028. Exchanges will be carried out reciprocally, subject to data confidentiality and security requirements. In practical terms, transaction data gathered by covered providers in Hong Kong will reach partner jurisdictions' tax authorities through annual automatic exchanges rather than on request, and comparable information will flow back to Hong Kong under the same reciprocal arrangements.

Updated CRS Rules Take Effect in 2028

The legislation also updates Hong Kong's Common Reporting Standard, which governs the annual exchange of financial account information. The amended CRS takes effect in 2028 and extends coverage to digital financial products while strengthening reporting and due diligence requirements. Exchanges under the updated standard, however, will not begin until 2029, when the Inland Revenue Department will automatically share financial account information with suitable partner jurisdictions. That sequencing means the expanded due diligence and reporting obligations will have been in force for a full year before the first exchanges under the revised standard occur.

Hong Kong has exchanged financial account information with partner jurisdictions annually since 2018 under the existing CRS. The government said the system helps tax authorities detect and combat tax evasion. The new law extends that established automatic-exchange model to the crypto-asset sector.

Implementation Support Outlined by Christopher Hui

Financial Services and the Treasury Secretary Christopher Hui said the law supports international tax transparency and cited efforts to combat cross-border tax evasion. He said alignment with international standards helps maintain Hong Kong's standing as an international financial and commercial center, adding that the changes would reinforce confidence among crypto-asset service providers and financial institutions. Digital asset users operating or investing in Hong Kong are also within the scope of the new regime.

To help businesses prepare, the Inland Revenue Department will issue guidance and has established a dedicated team to provide technical support and respond to industry questions about the new reporting requirements. With the 2027 data-collection start date set by the legislation, that forthcoming guidance is the key document to watch for details on how providers are expected to meet the new duties.