In a significant move toward enhancing tax transparency in the digital asset sector, Hong Kong has initiated a public consultation regarding amendments to its Crypto-Asset Reporting Framework (CARF) and the Common Reporting Standard (CRS). This consultation, announced on December 9, 2025, aims to develop a robust framework for the automatic exchange of crypto tax information, which is set to commence in 2028.
The CARF, introduced by the Organization for Economic Co-operation and Development (OECD) in 2023, aims to extend existing tax reporting protocols to cover crypto-asset transactions. This initiative follows Hong Kong”s ongoing efforts since 2018 to exchange financial account information annually with partner jurisdictions to combat tax evasion.
During the consultation, Christopher Hui, the Secretary for Financial Services and the Treasury, emphasized the importance of these amendments to the Inland Revenue Ordinance (Cap. 112). He stated that the new regulations will not only help Hong Kong fulfill its international obligations but also uphold its status as a leading global financial hub. “We plan to commence the automatic exchange of tax information on crypto-asset transactions from 2028 and implement the newly amended CRS starting in 2029,” Hui noted.
The proposed legislative changes signal a shift towards stricter regulatory oversight in the cryptocurrency market. Key elements of the consultation include mandatory registration requirements for financial institutions, enhanced identification protocols, increased penalty levels for non-compliance, and the establishment of more vigorous enforcement mechanisms. These measures are designed to ensure that Hong Kong maintains a favorable standing in OECD evaluations and adheres to international standards regarding data confidentiality and security.
The public consultation will remain open for feedback until February 6, 2026, allowing stakeholders and the general public to contribute their insights. Comments can be submitted via post or email, providing an opportunity for diverse perspectives to shape the final framework for crypto-asset tax reporting in Hong Kong.
This regulatory momentum aligns with Hong Kong”s broader objectives in the blockchain space, as exemplified by recent collaborations involving DigiFT, UBS, and Chainlink, which successfully validated on-chain automation for fund operations. Such advancements highlight the city”s commitment to fostering a regulated environment for blockchain-based finance.
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