Hong Kong CARF Bill Passes: Crypto Tax Reporting

Hong Kong’s Legislative Council has passed a bill that will make crypto-asset service providers collect information on their users for the tax authorities, putting the OECD’s Crypto-Asset Reporting Framework (CARF) into the city’s law. The same bill brings in an amended version of the Common Reporting Standard (CRS), which governs how financial account data is shared between tax authorities.

The Hong Kong government said on 4 November that LegCo had passed the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026. The bill sets out reporting rules. It does not create a new tax on crypto-assets.

In brief

Hong Kong has passed a bill that adopts the OECD’s CARF and an amended CRS.
Crypto service providers will start collecting information next year, with exchanges with partner jurisdictions starting from 2028.
These are reporting and information-sharing rules, not a new tax.

What the Hong Kong CARF bill requires

CARF, which the OECD published in 2023, asks service providers that handle crypto-assets for customers to gather specified information about those customers and their transactions and pass it to their tax authority. That authority then swaps the data with partner jurisdictions, in the same way banks’ account data is already shared under the CRS.

The government set out the timetable in its announcement. “CARF will be implemented in Hong Kong next year when relevant service providers will be required to collect the information specified under the framework for the Inland Revenue Department (IRD) to exchange with partner jurisdictions starting from 2028.”

The amended CRS follows a year later. “The amended CRS will also take effect in 2028, and the IRD will automatically exchange financial account information with suitable partners in accordance with the new standard starting from 2029.”

The bill text published by the IRD fixes the start dates: Part 2 commences on 1 January 2027 and Part 3 on 1 January 2028. The IRD will issue guidance and has set up a dedicated team to help the industry comply. A LegCo Secretariat notice on 2 November said the Second Reading debate on the bill would resume at the Council’s meeting on Wednesday 4 November, after which the bill would go to the committee of the whole Council and then be set down for its Third Reading. The government’s announcement later that day confirmed it had passed.

Christopher Hui, Secretary for Financial Services and the Treasury, framed the move as a boost to the city’s standing. “Aligning with the latest international standards will reinforce the confidence of crypto-asset service providers, financial institutions and digital asset users in operating and making long-term investments in Hong Kong,” he said.

Why Hong Kong CARF matters for its crypto push

Hong Kong has spent the past few years building a licensed crypto and tokenisation industry, and TSN has tracked a run of steps in that direction, from the SFC approving 24/7 trading of two tokenised money funds to Standard Chartered’s tokenised deposits for Hong Kong firms and HSBC’s RedCoin stablecoin on PayMe. CARF is the less glamorous side of that push. A financial centre that wants institutional money has to show other governments it will not become a blind spot for tax.

For users, the practical change is about visibility, not cost. Crypto holdings and transactions handled by covered providers will become reportable in much the same way as a bank account held abroad, and from 2028 that data can flow to partner jurisdictions. Nobody pays more tax because of the bill itself, but people who have not declared crypto gains at home may find their own tax authority receives the information.

For service providers, the burden is operational. They have about a year to set up systems to collect the required customer and transaction data before collection begins. The detail will sit in the IRD’s guidance, which is the next document to watch. It should show exactly which businesses count as reporting providers, what they need to collect from new and existing customers, and how reports reach the IRD.