Hong Kong passes crypto tax reporting law

Hong Kong’s Legislative Council passed a law on November 4 requiring covered crypto service providers to collect customer and transaction data from 2027, setting up annual reporting to tax authorities. The government said the measure implements the OECD’s Crypto-Asset Reporting Framework (CARF), with Hong Kong’s first exchanges of that information with partner jurisdictions due to start in 2028, according to its announcement on the bill’s passage.

Which crypto businesses must report?

The rules cover businesses that facilitate crypto trades for customers, including exchanges, brokers and operators of trading platforms, according to the Inland Revenue Department’s CARF guidance. A provider must have a reporting connection to Hong Kong, such as being tax resident, incorporated or managed there, or having a regular place of business in the city.

The department says reporting applies to customers who are tax residents of jurisdictions designated for reporting. The framework requires providers to identify those customers and report the required information to the relevant tax authority annually.

Which transactions and customer details are covered?

Reportable activity includes crypto-to-fiat trades, swaps between relevant crypto-assets and transfers, including transfers to external wallet addresses, the department says. Providers must submit customer identification details such as name, address, tax residence and taxpayer identification number, alongside aggregated transaction figures.

The figures include the amount or value, number of units and number of transactions for acquisitions, disposals and transfers. The government says service providers will collect the information specified under CARF for the Inland Revenue Department to exchange with partner jurisdictions.

When will reporting and exchanges begin?

Providers’ collection and reporting duties start in 2027, while automatic exchanges between Hong Kong and partner jurisdictions are scheduled to begin in 2028, the government said. Those exchanges will be reciprocal and subject to data confidentiality and security, according to the announcement.

Sources

• announcement on the bill’s passage — news.gov.hk
• CARF guidance — ird.gov.hk