Hong Kong’s Legislative Council has passed legislation adopting the OECD’s Crypto-Asset Reporting Framework (CARF), setting out new information-collection duties for crypto service providers from January 2027. The government confirmed the bill’s passage on November 4. Under the framework, businesses that fall within its scope will have to identify customers, establish their tax residency and report specified crypto transactions to the Inland Revenue Department (IRD). Hong Kong plans to begin exchanging the information with participating jurisdictions in 2028. The same legislation also updates the Common Reporting Standard (CRS), which covers financial account information and will include additional digital financial products. The changes concern tax reporting and information exchange; they do not introduce a blanket tax on crypto holdings or prohibit people from trading digital assets.Hong Kong’s CARF Rules Set Reporting Duties For Crypto Service ProvidersThe legislation brings Hong Kong into line with the OECD’s CARF, a framework published in 2023 to give tax authorities a standard way to exchange information about crypto-asset transactions across borders. The rules apply to reporting crypto-asset service providers with a relevant connection to Hong Kong. That can include businesses incorporated or organised in the city, entities managed there, tax-resident providers and businesses with a regular place of business or branch in Hong Kong. The scope depends on the services a business provides, rather than whether it calls itself an exchange. The IRD lists crypto exchanges, brokers, dealers and certain crypto-asset ATM operators among the examples. A provider can be covered when it carries out or facilitates exchanges between crypto-assets, or between crypto-assets and traditional currencies, for customers.Hong Kong Passes Crypto Tax Reporting Law, With Data Collection Starting in 2027Hong Kong’s Legislative Council passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 on November 4, implementing the OECD’s Crypto-Asset Reporting Framework (CARF). Under the new law, relevant crypto-asset service providers will be required to collect transaction information starting in 2027, with Hong Kong beginning automatic exchanges of crypto-related tax information with partner jurisdictions in 2028.The amended Common Reporting Standard (CRS) will take effect in 2028, with automatic exchanges of financial account information under the updated standard beginning in 2029. Hong Kong’s Financial Services and the Treasury Secretary Christopher Hui said the legislation aims to strengthen international tax transparency and combat cross-border tax evasion.— Wu Blockchain (@WuBlockchain) November 4, 2026From January 1, 2027, covered providers will have to carry out due diligence on customers and collect information needed to establish their tax residency. For individuals, this includes their name, address, tax-residence jurisdiction and taxpayer identification number. For companies and other entities, providers may also need information about the people who control them.The IRD says new customers will be asked to provide tax-residency self-certifications, while existing customers will have to complete the process within 12 months after the rules take effect. Businesses will also need to register with the department, file annual returns and keep records supporting their checks and reports. The department plans to issue guidance and provide technical support as companies prepare for the requirements.Hong Kong Plans First Crypto Tax Information Exchanges In 2028Hong Kong’s new reporting rules will also make it easier for tax authorities in other countries to check crypto activity involving their residents. Once the information-sharing system begins in 2028, participating jurisdictions will be able to receive details about reportable crypto transactions involving their tax residents. Whether those transactions are taxable will still depend on the laws of each country.The bill also changes Hong Kong’s existing Common Reporting Standard (CRS), which has been used to exchange financial account information with other jurisdictions since 2018. The revised rules will take effect in January 2028 and cover additional products, including central bank digital currencies, certain electronic money products and derivatives linked to crypto-assets. Financial institutions will also have to collect some additional details about account holders and the people who control those accounts. The first information exchanges under the updated CRS are expected in 2029. The two frameworks therefore have separate timelines: crypto service providers begin CARF due diligence and collection in 2027, with cross-border exchanges planned for 2028. The amended CRS takes effect in 2028, with exchanges following in 2029. The IRD says it will publish further guidance for affected businesses. For crypto users, the immediate change is that covered platforms will ask for tax-residency information and maintain records for reporting purposes. The legislation does not mean every wallet or every transaction is directly reported to overseas authorities.