Gov't to adopt Crypto-Asset Reporting Framework to enhance transparency

It plans to begin automatic exchanges under the framework by 2028.

The government has announced its commitment to adopting the Crypto-Asset Reporting Framework (CARF) to enhance international tax transparency and combat cross-border tax evasion. 

According to Secretary for Financial Services and the Treasury Christopher Hui, implementing CARF will uphold Hong Kong’s reputation as a global financial and business hub and its ongoing efforts to promote international tax cooperation.

Hong Kong’s implementation of CARF will be on a reciprocal basis with jurisdictions that meet the Organisation for Economic Cooperation and Development’s (OECD) standards for protecting data confidentiality and security. 

Based on the timetable set by the Global Forum on Transparency and Exchange of Information for Tax Purposes, the government plans to begin automatic exchanges under CARF by 2028, contingent on the completion of local legislative amendments by 2026.

Hui said the government will engage stakeholders and the public during the drafting of the necessary legislative changes.

CARF, introduced by the OECD in 2023, is the latest global standard for tax transparency. It aims to ensure that global tax compliance keeps pace with the rapid growth of the crypto-asset market.

As an extension of the Common Reporting Standard for the Automatic Exchange of Financial Account Information in Tax Matters, CARF establishes a mechanism for the annual automatic exchange of tax-relevant crypto-asset accounts and transaction data between jurisdictions where crypto-asset users or controlling individuals are tax residents.