The Hong Kong government recently announced its plans to implement a crypto asset reporting framework to combat cross-border tax evasion. This move was revealed during the Organization for Economic Co-operation and Development Global Forum on Transparency and Effective Exchange of Information in Tax Matters. The regulators aim to complete the necessary legislative amendments for this framework before 2026.
The main objective of this framework is to enhance global tax transparency and address issues related to cross-border tax evasion. It will require tax-paying residents to report their crypto accounts and transactions annually, building upon the existing reporting standards set by the Automatic Exchange of Financial Account Information in Tax Matters in the region.
The Hong Kong government intends to start implementing the crypto asset reporting framework with relevant tax jurisdictions by 2028. The information collected through this framework will be shared with tax authorities in different countries to ensure fair and effective global implementation.
Since 2018, Hong Kong has been exchanging financial account information with partner tax jurisdictions annually, allowing relevant tax authorities to utilize this data for tax assessments and to combat tax evasion. Christopher Hui, the Secretary for Financial Services and the Treasury in Hong Kong, emphasized the importance of implementing this framework to uphold Hong Kong’s reputation as an international financial and business center.
Hui stated that the implementation of the reporting framework aligns with Hong Kong’s commitment to promoting international tax cooperation efforts and ensuring global tax transparency. He also assured that regulators will consider input from stakeholders and the public when preparing the necessary legislative amendments.
In addition to this development, Hong Kong regulators are actively working on expediting the process of creating crypto regulations to keep pace with the rapidly evolving industry. This proactive approach demonstrates Hong Kong’s dedication to maintaining a responsible tax jurisdiction and fostering a conducive environment for the crypto sector to thrive.