Hong Kong has passed a new cryptocurrency tax reporting law that will require crypto service providers to collect customer and transaction information starting in 2027. The collected data will then be shared with overseas tax authorities from 2028 under international reporting rules.
The legislation was approved by Hong Kong’s Legislative Council on November 4. It adopts the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework, known as CARF, along with updates to the existing Common Reporting Standard (CRS).
Under the new rules, cryptocurrency exchanges, brokers, dealers and other covered service providers will have to collect information about their customers, tax residency and crypto transactions. They will submit this information to Hong Kong’s Inland Revenue Department, which will share it annually with participating international tax authorities.
The reporting requirements will cover transactions involving exchanges between cryptocurrencies and traditional currencies, trades between different digital assets and certain transfers to external wallets.
Crypto businesses will also need to follow customer verification, recordkeeping and reporting requirements. The rules are designed to help tax authorities identify cryptocurrency activity and improve efforts to prevent cross-border tax evasion.
The information will be exchanged on a reciprocal basis, meaning participating jurisdictions will also share relevant tax information with Hong Kong. Authorities must maintain appropriate standards for protecting the confidentiality and security of the data.
Financial Services and the Treasury Secretary Christopher Hui said adopting international tax reporting standards was important for maintaining Hong Kong’s position as a major financial and business center. He added that the new rules would strengthen confidence among financial institutions and companies operating in the digital asset industry.
Alongside the crypto reporting framework, Hong Kong will also update its Common Reporting Standard. The amended CRS will take effect in 2028, with the first international exchanges under the updated rules expected in 2029.
These changes will expand reporting requirements to cover certain digital financial products, including central bank digital currencies, specified electronic money products and financial instruments linked to cryptocurrencies.
Financial institutions will also face updated customer verification and reporting requirements. The legislation includes measures to prevent the same information from being reported twice under both CARF and CRS.
To help businesses prepare, Hong Kong’s Inland Revenue Department plans to publish detailed guidance and provide technical support to companies affected by the new rules.
The move is part of Hong Kong’s wider effort to strengthen regulation of its cryptocurrency industry. In October, the government also outlined plans to introduce additional licensing requirements for crypto dealing, custody, advisory and asset management services.
Hong Kong has also been working to expand regulated stablecoin trading and tokenized real-world assets as it develops its digital asset market.
However, questions remain about how much cryptocurrency activity the new reporting system will actually cover. A Chainalysis analysis cited in the report estimated that global onchain crypto activity potentially subject to taxation exceeded $457 billion in 2025, while only around 14% was within CARF’s practical reporting reach.
The remaining activity included decentralized exchange transactions, peer-to-peer transfers, onchain income and crypto payments that may fall outside the framework’s reporting coverage.
Overall, Hong Kong’s new law will bring cryptocurrency businesses under stricter tax reporting requirements and give authorities greater access to information about digital asset transactions across international markets.