Hong Kong Requires Crypto Providers to Track Customer Crypto Trades

Hong Kong’s Legislative Council passed a cryptocurrency tax-information reporting bill on Nov. 4, requiring covered crypto providers to collect customer trade information for tax authorities.

The implementation background sets Jan. 1, 2027, as the start of Crypto-Asset Reporting Framework collection. Covered providers would report information to the Inland Revenue Department, which is expected to begin international exchanges with partner jurisdictions in 2028.

The first collection year therefore comes before the cross-border sharing date for covered firms.

CARF sets due-diligence and annual reporting requirements for crypto-asset service providers. It addresses tax transparency by requiring providers to gather information that tax authorities can use, rather than setting individual users’ tax bills.

The bill also implements the amended Common Reporting Standard for financial account information. Hong Kong said the revised standard takes effect in 2028, with exchanges beginning in 2029. Its schedule is separate from the CARF timetable.

Collection comes before exchange

One bill, two reporting calendars. Covered providers collect CARF information in 2027, while the Inland Revenue Department begins international exchanges in 2028.

The Hong Kong government announced that the Legislative Council passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 on Nov. 4, 2026.

The government said covered providers must collect CARF information in 2027 so the Inland Revenue Department can begin exchanging it with partner jurisdictions in 2028.

The Inland Revenue Department’s implementation background specifies Jan. 1, 2027, for CARF and Jan. 1, 2028, for the amended CRS. The department’s CARF explanation is also relevant.

The government said the amended CRS will take effect in 2028, with exchanges under that revised standard beginning in 2029, separately from CARF’s 2027 collection and 2028 exchange timetable.

CARF is a tax-information transparency framework under which reporting crypto-asset service providers perform due diligence and report required information to tax authorities annually.

The timetable means covered providers’ information collection begins before the Inland Revenue Department’s first international exchanges, so 2028 is not the starting point for all preparation.

The announced schedules are future schedules, not exact exchange or domestic filing dates. Obligations depend on provider scope.

In December 2024, Hong Kong intended to complete legislative amendments by 2026 and begin crypto-information exchanges in 2028. The Nov. 4 vote marked the legislative milestone ahead of the collection year.

Provider scope and next steps

In its CARF explanation, the Inland Revenue Department described reporting providers as businesses carrying out customer exchanges between crypto-assets and fiat currencies, or between crypto-assets.

These include businesses acting as counterparties or intermediaries and those operating trading platforms. Obligations depend on the provider’s connection to a jurisdiction under the framework’s nexus rules.

The department describes reportable users and relevant controlling persons of entity users by tax residence in reportable jurisdictions. A provider must identify relevant users or controlling persons before it can prepare information for the annual reporting process described by the department.

Its explanation lists identifying details, tax-residence information, and aggregated transaction information among the required data. That scope is key when assessing a provider’s obligations and which customers’ information is reportable.

Hong Kong said exchanges will be reciprocal and subject to confidentiality and security safeguards. The Inland Revenue Department said it would issue guidance and established a dedicated team to provide technical support and answer industry inquiries.

The department also said it would develop a CARF reporting portal and publish the data schema that defines the reporting format, with further details to follow. Those materials would set out more of the reporting process for providers preparing to collect required data in 2027.

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