Hong Kong launched a public consultation on implementing the OECD’s Crypto-Asset Reporting Framework (CARF) and amended Common Reporting Standard (CRS), aiming to begin automatic exchange of crypto tax information with partner jurisdictions by 2028. The government plans to complete legislative amendments in 2026, strengthening the city’s commitment to international tax cooperation while maintaining its reputation as a global financial hub amid evolving digital asset regulations. Financial Services Secret ...

Regulatory Compliance - Hong Kong government initiates public consultation on revisions to Crypto Asset Reporting Framework (CARF) and Common Reporting Standard (CRS) [1] - Aims for automatic exchange of crypto asset tax information with partner jurisdictions reciprocally from 2028 [1] - Implementation targeted from 2029 to combat cross-border tax evasion [1]

Investment Rating - The report does not provide a specific investment rating for the industry Core Insights - The OECD adopted the Common Reporting Standard (CRS) in February 2014 to enhance tax compliance and international tax cooperation through automatic exchange of financial account information [18] - Amendments to the CRS were adopted in August 2022, expanding its scope to include electronic money products and central bank digital currencies, and strengthening due diligence and reporting requirements [19] Summary by Sections Section I: General Reporting Requirements - Reporting Financial Institutions must report information regarding each Reportable Account, including account holder details and account balances [24] - The report must identify the currency of each amount reported [28] Section II: General Due Diligence Requirements - Reporting Financial Institutions are required to use reasonable efforts to obtain Tax Identification Numbers (TINs) and dates of birth for Preexisting Accounts [28] - The information reported must include the account balance or value as of the end of the relevant calendar year [28] Section III: Due Diligence for Preexisting Individual Accounts - Specific procedures are outlined for identifying Reportable Accounts among Preexisting Individual Accounts [29] Section IV: Due Diligence for New Individual Accounts - Upon account opening, a self-certification must be obtained to determine the account holder's tax residence [37] Section V: Due Diligence for Preexisting Entity Accounts - Preexisting Entity Accounts with an aggregate balance exceeding USD 250,000 must be reviewed [41] Section VI: Due Diligence for New Entity Accounts - New Entity Accounts must also follow specific review procedures to determine if they are held by Reportable Persons [40] Section VII: Special Due Diligence Rules - Additional rules apply for determining whether an account holder is a Passive Non-Financial Entity (NFE) [43] Section VIII: Defined Terms - Key definitions related to financial institutions and account types are provided to clarify the reporting framework [46][47]