Hong Kong's Legislative Council has passed a crypto tax reporting bill that requires crypto service providers to collect customer transaction data starting in 2027, with international information exchanges set to begin in 2028.
Reporting Requirements for Crypto Service Providers
According to the Hong Kong government's November 4 announcement, lawmakers approved legislation adopting the OECD's Crypto Asset Reporting Framework (CARF). The law applies to all crypto exchanges, brokers, and other qualifying service providers in the city.
Starting January 1, 2027, covered crypto companies must collect customer information and report qualifying transactions to the Inland Revenue Department (IRD). The required data includes customers' names, addresses, tax residency, identification numbers, and dates of birth. Providers must report all crypto purchases, sales, exchanges, and transfers, including those to external wallets.
Businesses must register with the IRD from January 2027. Existing customers are required to provide tax residency declarations until January 2028, while new customers must provide them upon onboarding.
International Exchange of Crypto Data from 2028
Beginning in 2028, Hong Kong's tax department will exchange reported crypto information with participating jurisdictions. The framework is based on OECD principles for enhanced tax transparency between countries. The law does not impose an additional tax on cryptocurrency transactions.
Reporting requirements are triggered for qualifying businesses incorporated, tax-resident, managed, or operating in Hong Kong. Reporting is based on customers' tax residency and the participation of their jurisdiction in the information-sharing framework.
International exchanges will be conducted subject to "confidentiality and data security protection," the government said. Lists of participating jurisdictions will be published later.
Updates to Common Reporting Standard
Alongside the crypto framework, lawmakers approved changes to the existing Common Reporting Standard (CRS). The new rules will take effect in 2028, with automatic exchanges of financial account data starting in 2029. Hong Kong has exchanged financial account information under the existing CRS framework since 2018.
Financial Services and the Treasury Secretary Christopher Hui said international standards might boost the confidence of financial institutions, crypto companies, and users of digital assets.
Separately, Hong Kong has introduced 24/7 tokenized deposit settlement under Project Ensemble, allowing participating banks to process blockchain-based transactions around the clock.
The IRD has established a task force to support businesses preparing for compliance. The department will provide guidance and responses to technical questions from affected parties.
