Hong Kong commits to implement a crypto-asset reporting framework and plans to complete the required local legislative amendments by 2026

The Hong Kong government recently announced that it has informed the OECD Global Forum on Transparency and Effective Exchange of Information for Tax Purposes that Hong Kong is committed to implementing a reporting framework for crypto assets (reporting framework) to enhance international tax transparency and combat cross-border tax evasion. In view of the rapid development of the crypto asset market, the OECD announced the reporting framework in June 2023 to ensure global tax transparency. As an extension of the existing "Common Reporting Standard for Automatic Exchange of Financial Account Information in Tax Matters", the reporting framework provides for a similar mechanism for tax jurisdictions with crypto asset users or controllers as their tax residents to automatically exchange tax information related to crypto asset accounts and transactions every year. To ensure that the reporting framework can be implemented fairly and effectively worldwide, the Global Forum has invited all tax jurisdictions with relevant crypto asset industries and identified as directly related to the reporting framework (including Hong Kong) to implement the reporting framework. Hong Kong is committed to implementing the reporting framework with suitable partners on the basis of reciprocity, and the relevant partners must meet the standards for protecting the confidentiality and security of information. Taking into account the latest timetable set by the Global Forum, the Government initially plans to complete the required local legislative amendments by 2026 and to conduct the first automatic information exchange with relevant tax jurisdictions under the reporting framework from 2028.