Hong Kong's Legislative Council has passed a law adopting the OECD's crypto tax reporting framework. Crypto service providers must collect customer and transaction data from 2027, and authorities can share it with overseas tax agencies from 2028.
Hong Kong's Legislative Council passed a new crypto tax reporting law on November 4. The law adopts the OECD's Crypto-Asset Reporting Framework, known as CARF. Digital asset service providers must collect customer and transaction information from 2027, and automatic exchanges of tax data with partner jurisdictions start in 2028.
Exchanges, brokers and crypto ATMs fall under the rules
The framework applies to businesses that facilitate cryptocurrency transactions for customers, including exchanges, brokers, dealers and certain operators of crypto ATMs. Those with a reporting connection to Hong Kong face registration, customer due diligence, recordkeeping and reporting obligations.
Reports cover trades between cryptocurrencies and fiat currencies, trades between different crypto assets and certain transfers involving external wallets. Providers must also collect each reportable customer's tax residence and taxpayer identification numbers. Anyone filing a return should also know how to report crypto taxes across different countries.
Financial Services and the Treasury Secretary Christopher Hui said the requirements are part of the government's efforts to improve international tax transparency and tackle cross-border tax evasion. According to Hui: "Implementing the latest international standards for automatic exchange of information in tax matters is crucial" to maintaining Hong Kong's reputation as an international financial and commercial centre.
Amended standard follows in 2028
The law also amends the Common Reporting Standard, which Hong Kong has used since 2018 to exchange financial account information. The amended standard takes effect in 2028, with the first exchanges under it scheduled for 2029.
The changes extend the framework to certain digital financial products, including central bank digital currencies and financial instruments linked to cryptocurrencies. The Inland Revenue Department plans to publish implementation guidance and has set up a dedicated team to give technical assistance to affected businesses.
Coverage remains a question. Chainalysis estimated that transactions within the practical reach of CARF represented approximately 14% of potentially taxable onchain activity, which it put at more than $457 billion globally in 2025.
Source: crypto.news
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