Hong Kong Enacts New Law Mandating Crypto Tax Reporting from 2027

Hong Kong's New Tax Transparency Law

In a significant move to enhance global tax transparency, Hong Kong has enacted a new law requiring digital asset service providers to commence collecting transaction data from 2027. This legislation, formally known as the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026, received approval from the Legislative Council and aligns with international standards set by the Organisation for Economic Co-operation and Development (OECD).

Key Features of the Legislation

The new tax reporting requirements will enable Hong Kong’s Inland Revenue Department to annually exchange transaction information with tax authorities in other countries beginning in 2028. These exchanges will be reciprocal, ensuring that both Hong Kong and participating jurisdictions uphold stringent data confidentiality and security standards.

Under this framework, service providers dealing with cryptocurrencies—including exchanges, brokers, dealers, and certain ATM operators—must collect detailed customer transaction data for compliance. This includes gathering identifying information such as tax residency and taxpayer identification numbers, along with transaction specifics related to exchanges between crypto and fiat currencies, various crypto asset trades, and transfers to external wallets. The scope of the legislation encompasses both fungible and non-fungible assets used for investment or payment; however, central bank digital currencies and specified electronic money products are excluded from these obligations.

Consultation and Implementation

This new framework builds upon feedback gathered from consultations held between December 2025 and February 2026, during which stakeholders, including financial institutions and crypto businesses, shared their insights on the matter. The proposed law was first published in May 2026 and was introduced to lawmakers in June.

Financial Services and the Treasury Secretary, Christopher Hui, emphasized the significance of these regulations, stating that adopting the latest international standards is essential for preserving Hong Kong’s standing as a leading international financial hub.

He noted that aligning with these standards would bolster confidence among various stakeholders, including financial institutions and digital asset investors looking at the long-term prospects of the city.

Revisions to the Common Reporting Standard

In addition to the Crypto-Asset Reporting Framework, the law also revises the existing Common Reporting Standard (CRS), which Hong Kong has employed since 2018 for exchanging financial account data with international counterparts. The updated CRS will go into effect in 2028, with the first round of information exchanges anticipated for 2029, broadening the existing regulations to include certain digital financial products linked to cryptocurrencies.

To avoid duplicate reporting when transactions intersect with both CARF and the CRS, provisions have been included to streamline compliance for businesses. Additionally, to assist companies in adapting to these new requirements, the Inland Revenue Department is preparing guidance documents and has formed a specialized team to address technical questions and provide support.

Broader Regulatory Changes

This legislative initiative comes on the heels of other regulatory changes in Hong Kong's digital asset sector, including the introduction of licensing for additional virtual asset services encompassing trading, custody, advisory, and asset management. These licensing frameworks are poised to complement existing regulations governing cryptocurrency trading platforms and stablecoin issuers.

The regulatory landscape for digital assets in Hong Kong is evolving rapidly, with a September policy address hinting at further developments in regulated stablecoin trading and oversight measures for digital asset enterprises. Despite the ambitious tax reporting framework, experts note that a significant portion of cryptocurrency transactions may remain untapped by tax authorities; a previous report by Chainalysis estimated that approximately 86% of global on-chain cryptocurrency activity might occur outside the regulatory framework addressed by the new law.