Crypto Tax: Hong Kong Passes New Law Requiring Crypto Data Collection From 2027

Hong Kong approved new crypto tax reporting legislation on Nov. 4, extending international disclosure rules to digital assets. The Legislative Council adopted standards requiring covered businesses to collect customer and transaction information from 2027.

The Inland Revenue Department will begin exchanging qualifying records with overseas tax authorities in 2028. The legislation also expands financial account reporting under a separate implementation schedule.

Crypto Tax: New Law Sets Collection Rules for 2027

The crypto tax legislation adopts the Organisation for Economic Co-operation and Development’s Crypto-Asset Reporting Framework, known as CARF. The OECD developed the framework to help tax authorities obtain information about cryptocurrency activity involving residents of different jurisdictions.

Hong Kong will use the framework to establish common reporting requirements for businesses that handle crypto transactions on customers’ behalf. Hong Kong plans to apply those duties from January 1, 2027, under the implementation timetable.

The government introduced the bill after consulting financial institutions, professional groups and digital asset businesses between December 2025 and February 2026. Officials published the legislation in May and presented it to the Legislative Council in June.

Secretary for Financial Services and the Treasury Christopher Hui said the changes support international efforts to address cross-border tax evasion. The law establishes disclosure duties but does not introduce a separate cryptocurrency tax rate.

Crypto Exchanges and Brokers Must Collect Customer Details

The crypto tax requirements cover service providers that arrange exchanges between digital assets or convert cryptocurrencies into traditional currencies. Covered businesses include trading platforms, brokers, dealers and certain cryptocurrency ATM operators.

Companies must follow the rules when their operations meet Hong Kong’s reporting connection criteria, which include local tax residence, management or business presence.

Affected providers must obtain customers’ identifying details, including names, addresses, tax residences, and taxpayer identification numbers. They must also gather relevant transaction information and check customer declarations under due diligence procedures.

The framework covers cryptocurrency purchases, sales, crypto-to-crypto exchanges and certain transfers to external wallets. Companies must retain records for six years after the relevant return deadline.

CARF covers transferable digital assets that people can use for payments or investment, including qualifying non-fungible tokens. The framework excludes central bank digital currencies, specified electronic money products and crypto assets that cannot serve payment or investment purposes.

Overseas Crypto Tax Data Sharing Starts in 2028

Hong Kong’s Inland Revenue Department will receive the information from covered service providers and exchange qualifying records with partner tax authorities annually. The first international exchanges under CARF will begin in 2028, following the collection of information from 2027.

Authorities will use customers’ tax residence information to determine which jurisdictions should receive relevant records.

Hong Kong will share information only through reciprocal arrangements with eligible partners that meet confidentiality and data security requirements. The reporting system will give participating tax authorities access to standardized transaction records for their residents.

Also, the crypto tax requires annual totals for covered transaction types and the quantities of crypto assets involved.

Amended Financial Reporting Rules Begin in 2028

Lawmakers also adopted amendments to the Common Reporting Standard, which governs international exchanges of financial account information. The revised rules will take effect in 2028, while exchanges under the updated standard will start in 2029.

Hong Kong has used the existing standard to exchange information with partner jurisdictions since 2018.

The amended rules extend coverage to certain central bank digital currencies, electronic money products, and financial instruments linked to crypto assets. Financial institutions must provide additional details about account holders, controlling persons and relevant accounts.

The Inland Revenue Department plans to issue further implementation guidance and technical reporting specifications for affected businesses. Officials have established a dedicated team to answer industry questions on compliance and provide technical support.