Hong Kong Passes Crypto Tax Reporting Bill Under OECD Rules Starting in 2027

Hong Kong’s Legislative Council has passed a crypto tax reporting bill requiring service providers to collect customer transaction data from 2027, with international information exchanges beginning in 2028.

Hong Kong Crypto Reporting Rules Begin in 2027

According to the Hong Kong government’s November 4 announcement, lawmakers approved legislation adopting the OECD’s Crypto Asset Reporting Framework (CARF). This 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 requirements include names, addresses, tax residency, identification numbers and dates of birth of the customers. All crypto purchases, sales, exchanges, and transfers, including to external wallets, should be reported by providers.

Under the approved bill’s provisions, businesses must register with the IRD from January 2027. The customer should provide tax residency declarations existing customers until January 2028, new customers.

Tax Authorities To Begin Sharing Crypto Data in 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. But the law does not set up an additional tax on cryptocurrency transactions.

Meanwhile, French lawmakers narrowly approved a proposal to impose a 31.4% tax on cryptocurrency-to-stablecoin conversions starting in 2027. The measure still requires final approval.

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.

Hong Kong Updates Financial Reporting Standards

Alongside the crypto framework, lawmakers approved changes to the existing Common Reporting Standard (CRS).

The new rules will go into effect in 2028 and automatic exchanges of financial account data will start in 2029.

Hong Kong has exchanged financial account information under the existing CRS framework since 2018.

International standards might boost the confidence of financial institutions, crypto companies and users of digital assets, said Financial Services and the Treasury Secretary Christopher Hui.

Separately, Hong Kong has introduced 24/7 tokenized deposit settlement under Project Ensemble, allowing participating banks to process blockchain based transactions around the clock.

Meanwhile, the IRD has established a task force to support businesses preparing for compliance. The department will provide guidance and responses to technical questions that arise from those that are affected and impacted.

International exchanges will be done subject to “confidentiality and data security protection”, the government said. Lists of participating jurisdictions will be published later.