Hong Kong has passed a new tax declaration law for crypto assets, which will require digital asset service providers to collect transaction information starting from 2027, and allow relevant authorities to share this data with overseas tax authorities from 2028 onwards.

• On November 4, the Hong Kong Legislative Council passed a new tax declaration law for crypto assets, adopting the Organization for Economic Co-operation and Development's (OECD) "Framework for the Reporting of Crypto Assets" (OECD Framework for the Reporting of Crypto Assets).
• Cryptography service providers will be required to collect customer and transaction information starting from 2027, and the automatic exchange of tax data between Hong Kong and cooperating jurisdictions will begin in 2028.
• The revised Common Reporting Standards ( CRS ) will come into effect in 2028, and the exchange of international financial account information in accordance with the updated rules will begin in 2029.
• The Hong Kong Inland Revenue Department will issue guidelines and provide technical support to help affected enterprises comply with the new reporting requirements.

According to a announcement released by the Hong Kong government on November 4th, the Legislative Council has passed the "Tax (Amendment) (Cryptocurrency Asset Reporting Framework and Revised Joint Declaration Guidelines) 2026 Bill," bringing Hong Kong one step closer to implementing international tax reporting standards established by the Organization for Economic Co-operation and Development.

This legislation introduces the OECD 'Cryptocurrency Reporting Framework', namely CARF, and also makes amendments to the existing 'Joint Declaration Guidelines' ( CRS ). CRS is used to regulate the exchange of financial account information between tax authorities.

According to the new requirements, the covered cryptocurrency businesses will need to collect customer and transaction details and submit them to the Hong Kong Inland Revenue Department. The Inland Revenue Department will then exchange this information with eligible cooperating jurisdictions on an annual basis.

The Hong Kong government stated that such exchanges will operate on the principle of reciprocity, and the participating jurisdictions must maintain appropriate data confidentiality and security standards.

Hong Kong's crypto tax regulations will cover exchanges and customers' transactions

The CARF framework is applicable to enterprises that facilitate cryptocurrency transactions for clients, including exchanges, brokers, traders, and certain encrypted ATM operators.

Companies that have a reporting association with Hong Kong will need to fulfill obligations such as registration, customer due diligence, record keeping, and reporting.

The reporting requirements cover exchanges between cryptocurrencies and fiat currencies, transactions between different crypto assets, as well as some transfers involving external wallets.

Service providers must collect identity verification information of declarable customers, including their tax residency status and taxpayer identification numbers, as well as relevant transaction details.

This framework encompasses both homogenized and non-homogenized crypto assets that can be used for payment or investment. Central bank digital currencies, certain electronic currency products, as well as some assets that cannot be used for payment or investment, are excluded.

Prior to this legislation, the Hong Kong government conducted consultations from December 2025 to February 2026, seeking opinions from financial institutions, professional groups, and cryptocurrency companies.

Thereafter, Hong Kong announced a proposed bill in May and submitted it to members of the Legislative Council for review in June.

Hsu Ching-yu, the Secretary for Financial Affairs and Treasury, stated that the new requirements are part of the government's efforts to enhance international tax transparency and combat cross-border tax evasion.

Hsu Cheng-yu said, "Implementing the latest international standards for automatic exchange of tax information is crucial for maintaining Hong Kong's reputation as an international financial and commercial center."

He added that aligning with international standards will enhance the confidence of financial institutions, crypto companies, and digital asset users who are considering making long-term investments in Hong Kong.

Revised financial reporting standards will come into effect in 2028.

In addition to CARF, this legislation also makes amendments to the Common Reporting Standards. Since 2018, Hong Kong has been exchanging financial account information with overseas tax authorities in accordance with these standards.

The revised CRS will come into effect in 2028, and the first information exchange required according to the updated regulations is scheduled for 2029.

These modifications expand the coverage of the existing framework to include certain digital financial products, such as central bank digital currencies, specific electronic currency products, and financial instruments linked to cryptocurrencies.

Financial institutions will face updated due diligence requirements, as well as additional reporting obligations regarding account holders, controllers, and financial accounts.

The revisions also include provisions to prevent duplicate declarations, in order to handle transactions of related cryptographic assets that fall within both the scope of CARF and the updated CRS.

To help affected businesses prepare, the Hong Kong Inland Revenue Department plans to issue implementation guidelines and has established a dedicated team to provide technical assistance and respond to industry questions.

Before the introduction of this legislative declaration, there had already been other regulatory changes in Hong Kong's digital asset industry.

In October this year, the Hong Kong government outlined plans to implement a licensing system for four additional categories of virtual asset services, covering trading, custody, consulting, and asset management activities.

The proposed card distribution system will be implemented in parallel with the existing regulatory rules for cryptocurrency trading platforms and stablecoin issuers.

The policy address released in Hong Kong in September also proposed plans to expand regulated stablecoin trading and the tokenization of real-world assets, as well as to strengthen additional monitoring measures for digital asset businesses.

OECD The coverage of the encryption declaration framework remains a topic of concern.

This international reporting framework has also drawn attention to the extent to which tax authorities can cover cryptocurrency activities through regulated service providers.

As reported by crypto.news prior to August this year, blockchain analytics firm Chainalysis estimates that the global potential taxable cryptocurrency activity on-chain will exceed $457 billion by 2025.

According to the company's analysis, in fact, transactions that are within the reach of CARF account for about 14% of such activities.

The remaining 86% includes decentralized exchange transactions, peer-to-peer transfers, on-chain income, and cryptocurrency payments that are not actually covered by the framework's reporting requirements.

OECD was initially released in 2023. CARF aims to establish a unified system that enables participating jurisdictions to exchange information on cryptocurrency transactions involving their tax residents.

The Hong Kong government stated that the Inland Revenue Department will continue to cooperate with the industry to promote the implementation and provide technical support to enterprises preparing to comply with the new requirements.