The OECD Global Forum announced Hong Kong’s commitment to finalizing a comprehensive crypto asset reporting framework by 2026. The framework is meant to help global tax transparency and fight cross-border tax evasion.
Hong Kong’s government representatives announced on December 13 that they were ready to build a crypto asset reporting framework in the Organisation for Economic Cooperation and Development (OECD) Global Forum on Transparency and Effective Exchange of Information in Tax Matters.
In this case, the proposed framework will require taxpayers to declare crypto accounts and transactions annually. This initiative’s foundation is the AEOI system, already in place in Hong Kong. As of 2018, this information can be shared with partner jurisdictions.
Hong Kong Prioritizes Global Tax Cooperation And Transparency
The government intends to collaborate with international tax jurisdictions in 2028 to initiate the implementation of the framework, with its legislative amendments targeted for completion in 2026.
Hong Kong’s efforts to promote international tax cooperation and stop cross-border tax evasion were behind the crypto asset reporting framework proposal. This framework will ensure that the information gathered under it is shared among the relevant tax authorities of the participating jurisdictions for fair taxation and to enable effective implementation across borders.
Hong Kong’s ability to retain its status as an international financial and business center and as a responsible tax jurisdiction depends on implementing the reporting framework, Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, has stressed.
Hui said international tax coordination is key and reiterated Hong Kong’s support for global tax transparency. He also said stakeholders and the public would be considered when preparing the legislative amendments.
Since 2018, Hong Kong’s annual financial account information has been exchanged with partner jurisdictions under its AEOI system. Tax authorities use this data for various tax assessments, such as assessing tax liabilities and finding evasion.
However, the upcoming framework will take that system one step further, mandating that residents report any information about crypto holdings and transactions.
It aligns with Hong Kong regulators’ efforts to adapt to the fast-changing crypto industry. Authorities are racing to accelerate the rollout of crypto rules and transition the region into the regulatory frontlines without undercutting its robust rulemaking reputation.
Integrating crypto assets into Hong Kong’s tax reporting regime is intended to reflect the city’s strengthening position as a financial hub while addressing the looming challenges of growing crypto usage.
As the deadline for implementing the framework approaches, Hong Kong’s regulatory actions could also set a precedent for other jurisdictions that must figure out how to navigate the overlap between crypto assets and international tax compliance.
