Hong Kong enacts crypto-asset reporting: registration and returns from 2027

Hong Kong has enacted the framework that pulls crypto-asset intermediaries into automatic tax information exchangeIRD. The Inland Revenue Department added the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026, passed on 4 November 2026IRD, to its Ordinances Administered page, and the resulting Ordinance No. 8 of 2026 is now in the GazetteIRD. The statute implements the OECD Crypto-Asset Reporting Framework (CARF)IRD and the amended Common Reporting Standard (CRS)IRD. It operates generally on Gazette publication; the CARF duties commence on 1 January 2027IRD and the amended-CRS duties on 1 January 2028IRD.

The CARF net is cast by nexus, not licensingIRD. A reporting crypto-asset service provider — broadly, anyone providing exchange transactions for customers as a business, including as counterparty, intermediary or trading-platform operator — counts as a Hong Kong reporting provider (HKRCASP) if it is Hong Kong tax resident, is incorporated or organised under Hong Kong law with legal personality or an Inland Revenue filing obligation, is managed from Hong Kong, or has a regular place of business hereIRD. A provider with a Hong Kong branch through which relevant transactions are effectuated is caught for those transactions. Carve-outs avoid double diligence where the same requirements are already met in a partner jurisdiction, but registration is always requiredIRD.

Every HKRCASP must register with the Commissioner electronicallyIRD, by 31 January of the calendar year after it first meets the nexus testIRD — so providers already touching Hong Kong face 31 January 2028IRD. It must run CARF due diligence under the new Schedule 17EAIRD: identify each customer-user's tax residence and each controlling person behind passive entity usersIRD, determine reportable users and reportable personsIRD, and keep the evidence and records for six years after the calendar year (longer where a return is required)IRD. Returns are filed on an assessor's notice covering the preceding calendar yearIRD, in the Commissioner's electronic form; a provider with no reportable users files a nil statement. Engaging an outside service provider to do the work is allowed, but the liability stays with the HKRCASPIRD, and reported information may be used to administer and enforce the Ordinance.

From 2028, reporting financial institutions face a wider CRSIRD. The definition of depository account gains two limbs: an account or notional account that represents all specified electronic money products held for the benefit of a customer, and an account that holds one or more central bank digital currencies for the benefit of a customerIRD, and derivatives referencing relevant crypto-assetsIRD plus investment entities investing in them fall inside CRSIRD. Institutions must report extra data — whether valid self-certification was obtained, the roles of controlling persons and equity holders, pre-existing versus new account status, joint-account details and account type. Where an institution is also a crypto-asset service provider, crypto-asset sale proceeds go under CARF, not CRS, with an option to report under bothIRD.

Breach carries layered consequences. Failing to register or file attracts a level-3 fineIRD plus a court compliance order and $500 per continuing dayIRD; due-diligence failures and materially incorrect returns draw level 3 or $1,000 per affected user, whichever is higherIRD, knowing or reckless falsehoods level 4 or $5,000 per userIRD, and deliberate fraud up to level 6 or $20,000 per userIRD with three years' imprisonment on indictmentIRD. The Commissioner or a deputy may instead assess a financial penalty up to the equivalent fineIRD, after 21 days for representations, appealable to the Board of Review.

Legal basis: Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Ordinance 2026 (Ord. No. 8 of 2026)IRD, Part 8B and Schedules 17EA/17C/17D to the Inland Revenue Ordinance (Cap. 112).