Hong Kong has passed a law requiring crypto exchanges and other covered service providers to collect customer and transaction data for tax purposes from 2027, with the information to be automatically shared with overseas tax authorities from 2028.
The government said the rules will take effect in 2027 and that the first exchanges of information between tax authorities will begin in 2028.
The law adopts the Organization for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF), released in October 2022 and designed to help governments identify crypto transactions that may otherwise go unreported for tax purposes.
Crypto exchanges and brokers covered by the rules will have to record customers’ names, addresses, tax residency, and identification numbers, along with records of crypto purchases, sales, and transfers.
That includes buying and selling cryptocurrencies, swapping one token for another and sending funds to external wallets. The Inland Revenue Department will share customer details and annual transaction totals with tax authorities in participating jurisdictions where those customers are tax residents.
Hong Kong introduced licensing requirements for crypto exchanges in 2023. Under the new law, exchanges must also report customer transactions to overseas tax authorities.
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