The Hong Kong government has committed to implementing a mandatory reporting framework for crypto assets by 2026.
On 13 December 2024, the Hong Kong authorities made this declaration at the OECD Global Forum on Transparency and Effective Exchange of Information in Tax Matters.
Most importantly, the country is taking proactive measures regarding regulating cryptocurrencies to counter cross-border tax evasion.
Commenting on this development, the Minister of Financial Services and Treasury said, “The reporting framework is the latest global standard for tax transparency,” said Hui Qingyu.
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The proposed framework would require residents to report cryptocurrency transactions
Hong Kong pledges a reporting framework for crypto assets by 2026 to combat tax evasion pic.twitter.com/4hPXGj3D85
— The Crypto Era (@_cryptoera_) December 17, 2024
The proposed crypto asset reporting framework would require tax-paying residents of the country to annually report their cryptocurrency accounts and transactions.
This relies on the automatic exchange of financial account information in the region for tax matters. this It has been in operation since 2018. Under this system, Hong Kong shares financial account data with partner jurisdictions to facilitate tax assessments and evasion detection.
The new framework will expand these efforts to include cryptocurrency transactions.
Once implemented, the collected data will be shared with tax authorities globally to ensure fair and efficient implementation of tax laws.
Previously, the OECD announced a reporting framework in June 2023. This was also intended to ensure that global tax transparency is maintained.
Hong Kong is considering a global standard for tax transparency
“Implementing the reporting framework is vital to maintaining Hong Kong’s reputation as an international financial and business center and reflects Hong Kong’s reputation as a responsible tax jurisdiction. Hong Kong is committed to strengthening international tax cooperation efforts,” Qing Yu said.
According to the government press release, “Hong Kong has always strongly supported international efforts to improve tax transparency and combat tax evasion.”
Since 2018, the country has automatically exchanged financial account information with partner tax authorities every year. The relevant tax authorities may use the information to conduct tax assessments and detect and combat tax evasion.
“The government will listen to the opinions of relevant stakeholders and the public when preparing the necessary legislative amendments,” Qing Yu said.
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