Hong Kong’s Legislative Council has passed amendments to the Inland Revenue Ordinance to bring the city into line with new OECD standards for reporting cryptoasset transactions and financial account information. The legislation adopts both the Crypto-Asset Reporting Framework, or CARF, and an updated Common Reporting Standard, known as the CRS.

Under the timetable set out by the government, relevant cryptoasset service providers will begin collecting specified transaction data in 2027. Automatic exchanges of that crypto-related information with other jurisdictions are due to start in 2028, while the revised CRS will take effect in 2028 and financial account data exchanges under the updated standard will begin in 2029.

What the new law covers

The measure passed by lawmakers is the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026. It is designed to implement reporting rules developed by the Organisation for Economic Co-operation and Development for both cryptoassets and more traditional financial accounts.

According to the government, the changes are aimed at improving tax transparency and helping to address cross-border tax evasion. The move extends Hong Kong’s existing reporting architecture into areas that include digital assets and newer forms of financial products.

Crypto reporting begins first

Under CARF, relevant cryptoasset service providers will be required to gather specified transaction information. That information will then be available for the Inland Revenue Department to transmit to other participating jurisdictions.

The collection phase for crypto transaction data is scheduled to start in 2027. The automatic exchange of that information is set to begin in 2028, creating a cross-border reporting channel for crypto-related tax data on a reciprocal basis.

Updated CRS follows on a later schedule

The bill also incorporates an amended version of the Common Reporting Standard, the OECD framework already used for the automatic exchange of financial account information. In Hong Kong, exchanges under the existing CRS have been in place with partner jurisdictions since 2018.

The updated CRS broadens reporting and customer due diligence obligations so they also cover digital financial products. Those revised rules will take effect in 2028, while automatic exchanges of financial account information under the updated regime are due to start in 2029.

Government rationale and implementation support

Hong Kong’s government said aligning with international standards is important for maintaining the city’s position as an international financial and commercial hub. It also said the new framework should help reinforce confidence among cryptoasset service providers, financial institutions and users of digital assets.

Officials added that data exchanges will only take place with relevant jurisdictions on a reciprocal basis and will be subject to confidentiality and information security requirements. To support implementation, the Inland Revenue Department plans to issue guidance and provide a dedicated technical support team for affected market participants.

What comes next

The next confirmed step is operational preparation before the reporting deadlines arrive. For crypto service providers, the first major milestone is 2027, when transaction data collection is due to begin under CARF.

After that, Hong Kong is expected to move into international information-sharing phases: crypto-related exchanges from 2028, followed by financial account exchanges under the updated CRS from 2029. The law marks another step in the expansion of Hong Kong’s regulatory framework for digital assets.

Source: incrypted.com