Public consultation on implementation of Crypto-Asset Reporting Framework and amendments in relation to Common Reporting Standard launched

On December 9, the Government of Hong Kong initiated a public consultation on implementing the Crypto-Asset Reporting Framework ("CARF") and amending the Common Reporting Standard ("CRS").

This initiative aims to enhance tax transparency and combat cross-border tax evasion.

Hong Kong has long been a proponent of international efforts to address tax issues, with regular annual exchanges of financial account information with partner jurisdictions under the CRS.

The OECD published CARF in 2023 to address the rapid development of digital asset markets, highlighting the need for a robust framework for reporting and exchanging crypto-asset information.

The Secretary for Financial Services and the Treasury, Mr. Christopher Hui, underscored the Government's commitment to promoting international tax cooperation and combating tax evasion.

The Government plans to complete local legislative amendments by 2027, with the automatic exchange of crypto-asset tax information slated to commence in 2028 and the newly amended CRS to be fully implemented by 2029.

Hong Kong will exchange information with suitable partners who meet stringent data confidentiality and security standards on a reciprocal basis.

Starting in 2024, the OECD will conduct the second round of a peer review on Hong Kong's CRS administrative framework to ensure compliance and effectiveness.

The Government proposes legislative amendments to introduce mandatory registration for financial institutions, raise penalty levels, and strengthen enforcement mechanisms to maintain a favorable OECD rating.

The consultation paper is available online and invites public input by post or email by February 6, 2026.