The Hong Kong Government Commits to Global Crypto Tax Reporting Framework by 2028
The Hong Kong government has reaffirmed its intention to adopt a global crypto tax reporting framework by 2028, as stated in a recent announcement.
Background
Following discussions with the Organization for Economic Cooperation and Development (OECD) Global Forum on Transparency and Exchange of Tax Information, Hong Kong has decided to expand the existing Common Reporting Standard (CRS) to include crypto asset transactions.
Key Points
- The framework, introduced in June 2023, aims to enhance transparency and combat cross-border tax evasion by establishing an automated system for sharing crypto account data across tax jurisdictions.
- Legislative amendments are being prepared to align with the framework, with completion expected by 2026.
- The first automatic exchange of crypto-related information with participating jurisdictions is set to occur in 2028, enabling tax authorities worldwide to enforce global tax compliance effectively.
- Since 2018, Hong Kong has been sharing financial account information with tax partners annually to support assessments and detect evasion.
Significance
Secretary for Financial Services and the Treasury Christopher Hui emphasized the importance of this initiative in maintaining Hong Kong’s reputation as an international financial and business center. He highlighted the city’s commitment to international tax cooperation and responsible tax governance.
Broader Efforts
This move is part of Hong Kong’s broader strategy to establish itself as a leading crypto-friendly hub. Initiatives such as proposed tax breaks for hedge funds and private equity firms aim to attract global investors. Additionally, the recently published stablecoin regulation bill outlines guidelines for issuers and marketers, reinforcing Hong Kong’s commitment to regulatory clarity in the digital asset space.
