Hong Kong to Finalize Crypto Asset Reporting Framework by 2026

The Hong Kong government has committed to establishing a comprehensive crypto asset reporting framework aimed at combating cross-border tax evasion. This declaration was made during the Organization for Economic Co-operation and Development (OECD) Global Forum on Transparency and Effective Exchange of Information in Tax Matters on December 13. Regulators plan to complete the necessary legislative amendments by 2026.

Advancing Tax Transparency

According to a government press release, the forthcoming framework is designed to enhance global tax transparency and tackle cross-border tax evasion. Building on Hong Kong’s existing Automatic Exchange of Financial Account Information in Tax Matters, the new framework will mandate tax-paying residents to report crypto accounts and transactions on an annual basis.

The regulatory framework is expected to be operational by 2026, with implementation across relevant tax jurisdictions slated for 2028. The gathered data will be shared with international tax authorities knowledgeable about crypto assets to ensure equitable and effective enforcement worldwide.

Hong Kong’s Commitment to Financial Cooperation

Since 2018, Hong Kong has been exchanging financial account information annually with partner jurisdictions to aid in tax assessments and detect tax evasion. The introduction of the crypto asset reporting framework underscores the government’s dedication to global tax cooperation.

Christopher Hui, Secretary for Financial Services and the Treasury, emphasized that the initiative aligns with Hong Kong’s reputation as an international financial and business hub.

“Implementing the reporting framework is vital to maintaining Hong Kong’s standing as a responsible tax jurisdiction and reflects our commitment to international tax transparency,” Hui stated.

Hui also assured that the government will consult with stakeholders and the public to incorporate their feedback into the legislative process, ensuring a balanced and inclusive approach to the new regulations.

Accelerating Crypto Regulations

This development comes as Hong Kong regulators intensify efforts to accelerate the creation of comprehensive crypto regulations to keep pace with the rapidly evolving industry. The government’s proactive approach aims to balance innovation with accountability, ensuring the region remains a leading player in the global financial landscape.

By establishing a robust reporting framework, Hong Kong seeks to bolster its position as a responsible and forward-thinking financial center while addressing the complexities of crypto asset taxation on a global scale.