Hong Kong Launches Public Consultation on Crypto Tax Reporting Framework

Source: DefiPlanet Original Title: Hong Kong Launches Public Consultation on Crypto Tax Reporting Framework Original Link:

Overview

• Hong Kong launches public consultation on amendments to the CARF and CRS for crypto tax reporting.
• Automatic exchange of crypto tax info planned from 2028; CRS updates effective 2029.
• Legislative proposals include mandatory registration, higher penalties, and more vigorous enforcement.

Hong Kong’s government has launched a public consultation on the implementation of the Crypto-Asset Reporting Framework (CARF) and related amendments to the Common Reporting Standard (CRS), aiming to enhance tax transparency in the growing digital asset market. The consultation, announced on December 9, follows guidelines set by the Organization for Economic Co-operation and Development (OECD).

CARF implementation to strengthen crypto tax transparency

Since 2018, Hong Kong has been exchanging financial account information annually with partner jurisdictions under the CRS to combat tax evasion. The CARF, introduced by the OECD in 2023, extends these standards to crypto-asset transactions, requiring reporting of digital financial products and stricter due diligence measures.

Secretary for Financial Services and the Treasury, Christopher Hui, emphasized that the amendments to the Inland Revenue Ordinance (Cap. 112) will help Hong Kong meet its international obligations while preserving its reputation as a global financial and commercial hub. “We plan to commence the automatic exchange of tax information on crypto-asset transactions from 2028 and implement the newly amended CRS starting in 2029,” Hui said.

Legislative proposals and enforcement measures

The consultation outlines proposed local legislative amendments, including mandatory registration for financial institutions, enhanced identification requirements, higher penalty levels, and stronger enforcement mechanisms. These changes are intended to maintain Hong Kong’s favourable rating in OECD peer reviews and ensure compliance with international standards for data confidentiality and security.

The Financial Services and the Treasury Bureau has opened the consultation for public feedback until February 6, 2026. Stakeholders and members of the public can submit their views via post or email to help shape the final framework for crypto-asset tax reporting in Hong Kong.

Hong Kong’s regulatory momentum continues to accelerate: DigiFT, UBS, and Chainlink recently completed a technical pilot validating that fund operations can be executed entirely through on-chain automation, a notable milestone in the city’s push toward regulated blockchain-based finance.