Hong Kong Commits To Implementing Crypto Asset Reporting Framework

According to Odaily, the Hong Kong government has recently announced its commitment to the Organization for Economic Co-operation and Development's (OECD) global forum on tax transparency and effective information exchange. Hong Kong has pledged to implement the Crypto Asset Reporting Framework (CARF) to enhance international tax transparency and combat cross-border tax evasion. This move comes in response to the rapid development of the crypto asset market, prompting the OECD to introduce the reporting framework in June 2023 to maintain global tax transparency. The CARF serves as an extension of the existing Common Reporting Standard for the automatic exchange of financial account information on tax matters. It establishes a similar mechanism for jurisdictions where users or controlling persons of crypto assets are tax residents, enabling the automatic annual exchange of tax-related information on crypto asset accounts and transactions. The global forum has invited all jurisdictions with relevant crypto asset industries, including Hong Kong, to implement the CARF to ensure fair and effective global application. Hong Kong has committed to implementing the CARF with suitable partners on a reciprocal basis, provided these partners meet the standards for data confidentiality and security. Considering the latest timeline set by the global forum, the Hong Kong government plans to complete the necessary local legislative amendments by 2026. The first automatic exchange of information under the CARF with relevant tax jurisdictions is expected to commence in 2028.