Hong Kong to Complete Legislative Changes for Crypto Reporting by 2026

By Umair Younas December 17, 2024, 11:48 am • Posted in Cryptocurrency

The Hong Kong government has announced its commitment to implementing a crypto asset reporting framework. This initiative aims to improve international tax transparency and address cross-border tax evasion. The government made this revelation in its letter to the OECD Global Forum on Transparency and Effective Exchange of Information for Tax Purposes.

Hong Kong Commits to Crypto Asset Reporting Framework for Tax Transparency

The first strategy for local legislative changes is to achieve all the changes within the local legislation by 2026 at the latest. Also, under the new framework, Hong Kong will enter into automatic exchange of information with relevant tax authorities from 2028.

According to the reporting framework launched by the OECD in June 2023, global tax transparency was preserved. The framework is based on the extension of the Common Reporting Standard for the Automatic Exchange of Financial Account Information in Tax Matters. It also establishes a mechanism for an automatic exchange of the accounts of crypto-assets and transactions at least on an annual basis. This exchange will happen in the tax jurisdictions that the users or controllers of the crypto-assets are tax residents.

The Global Forum has asked all tax jurisdictions, which Hong Kong is, that has relevant crypto industries to adopt this reporting framework. This will help facilitate a fair and proper implementation across the global market.

Hong Kong to Collaborate on Crypto Reporting with Partners Ensuring Data Security

Mr Hui Ching-yu Secretary for Financial Services and the Treasury supported that the said framework is the current international standard for tax transparency. He said that the implementation of the policy is crucial for continuation of Hong Kong’s status of an international financial center. It also speaks volume of the fact that Hong Kong is a responsible tax territory and has active participation in international tax relations.

The Hong Kong government intends to cooperate with appropriate partners in accordance with the policy of reciprocity. Such partners must possess the minimum requirement of data confidentiality and data security. The government aims to finish the legislative changes by 2026 while the first of the automatic information exchanges will take place in 2028.

Hui also said that before the changes in the laws are enacted, the government will engage other stakeholders and the society.