Hong Kong has launched a public consultation on how to align itself with the international Crypto-Asset Reporting Framework (CARF), as more jurisdictions seek to implement the standard.
According to a recent press release from the Government of Hong Kong, the special administrative region is seeking feedback on the implementation of the Common Reporting Standard (CRS) and its amendments.
The CARF is an international tax transparency initiative launched in June 2023 by the Organisation for Economic Co-operation and Development (OECD), a global institution that promotes policies to improve world trade and economic progress. Essentially, CARF establishes a standard for tax reporting and the exchange of information between countries regarding crypto-asset transactions, aiming to combat tax evasion and avoidance.
“The OECD published CARF to provide for the automatic exchange of tax information on crypto-asset transactions with partner jurisdictions on an annual basis, and incorporated into the CRS new digital financial products and enhanced requirements regarding reporting and due diligence,” explained the Hong Kong government in a statement. “Hong Kong has long been supportive of international efforts to enhance tax transparency and combat cross-border tax evasion.”
The government said that the region has already been exchanging financial account information automatically with partner jurisdictions on an annual basis since 2018, in accordance with CARF.
However, in the light of a second round of peer review on the effectiveness of Hong Kong’s administrative framework, conducted in 2024 by the OECD, the special administrative is now consulting on several more amendments to its tax regime, “in order to maintain a favourable rating in the OECD’s peer reviews and maintain Hong Kong’s reputation as an international financial and commercial centre.”
Specifically, the government is proposing to introduce mandatory registration for financial institutions to enhance identification, as well as to increase penalty levels and strengthen enforcement mechanisms.
“To demonstrate our commitment to promoting international tax co-operation and combating cross-border tax evasion, as well as to fulfil our international obligations, Hong Kong will make amendments to the Inland Revenue Ordinance,” said Christopher Hui, Secretary for Financial Services and the Treasury. “The Government plans to complete the necessary local legislative amendments in the coming year, with a view to commencing the automatic exchange of tax information on crypto-asset transactions with relevant partner jurisdictions starting from 2028, and implementing the newly amended CRS starting from 2029.”
He added that the proposed measures are “of paramount importance in maintaining Hong Kong’s reputation as an international financial and commercial centre.”
The consultation paper is open to all members of the public to give their feedback on the proposed changes by February 6, 2026.
Global crackdown on crypto tax evasion
Hong Kong’s move to amend its tax regime represents just the latest development in an ongoing global crackdown on tax evasion that is gaining momentum, likely inspired by a boom time for digital assets more broadly; digital asset adoption rates continue to grow globally, and the sector’s market cap crossed the $4 trillion threshold for the first time in 2025.
With an ever-increasing number of investors, users, and digital asset businesses facilitating the flow of money into and through the digital asset space, it is no surprise that global authorities have become increasingly concerned about ensuring taxes are not overlooked.
Leading the charge is the OECD, with the publication of CARF in June 2023. Since then, it has been working to encourage and assist jurisdictions around the world in signing up for and implementing the framework. It was recently revealed that 75 jurisdictions have now committed to the rules, including “the vast majority” of digital asset centers.
One such center is the United Kingdom, which confirmed in its 2025 Budget, published this November, that it will implement new rules to bring itself in line with CARF, including mandating digital asset traders to report personal details to trading platforms for tax purposes, beginning January 1 of next year.
Another is Canada, where it was revealed earlier this month that the local tax authority is in the midst of a crackdown on crypto tax evaders. Over the past three years, it has conducted an audit on 230 files, uncovering CAD$100 million (approximately USD$72 million) in unpaid taxes.
Now, Hong Kong appears to have committed to adding its name to this list, barring any radical changes of heart as a result of its consultation.
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Source: https://coingeek.com/hk-consults-on-crypto-tax-changes-commits-to-global-standards/
