Hong Kong Proposes Amendments to Tax Ordinance, Crypto Asset Reporting Framework to Take Effect from 2027
N.R. Finch
Hong Kong moved on June 3 to amend its Tax Ordinance, requiring crypto service providers to report cross-border user transactions from 2027 and automatically exchange that data with partner jurisdictions from 2028 — formally bringing crypto assets into the global tax-transparency regime.
What does this bill actually do?
One core mandate: crypto asset service providers operating in Hong Kong must conduct due diligence on users — identifying which tax jurisdiction each user belongs to — then report cross-border transaction data to Hong Kong's Inland Revenue Department (IRD).
The IRD will then automatically exchange that data with overseas tax authorities every year.
This means → crypto transactions used to sit in an information vacuum between national tax systems. This framework aims to close the gap.
What is the timeline?
From 2027: the reporting framework takes effect — providers register, conduct due diligence, and begin filing.
From 2028: cross-border automatic exchange of tax data officially starts.
In plain terms = 2027 is the "build the file" year; 2028 is when the data actually flows to the tax authority where you reside.
Why is Hong Kong doing this?
Acting Secretary for Financial Services and the Treasury Chan Ho-lim told the Legislative Council explicitly: failure to comply could see Hong Kong labeled a "non-cooperative tax jurisdiction."
This reflects an external push, not a domestic crackdown — the OECD (the policy-coordination body for major economies) released this framework in 2023, and financial centres worldwide are adopting it.
A "non-cooperative" label would raise compliance costs and tax burdens for Hong Kong-based businesses operating overseas.
What does it mean for the crypto industry in practice?
Every crypto asset service provider with a "reporting nexus" to Hong Kong must register with the IRD.
Providers must retain due-diligence records — even after dissolution or ceasing operations.
The bill introduces penalty mechanisms for providers that breach reporting or due-diligence rules, and for individuals who knowingly submit false self-certifications.
Not just crypto — traditional finance is widened too?
The bill simultaneously updates the Common Reporting Standard (CRS — the existing framework for exchanging bank-account data across jurisdictions), expanding its scope to cover digital financial products.
It also adds new disclosure requirements for account holders, controlling persons, and their financial accounts.
This means → crypto is not the only target. Any financial product that exists in digital form is caught in the broader tightening of cross-border reporting.
Hong Kong must implement these new measures through amending the Inland Revenue Ordinance, to fulfill our international tax cooperation obligations, maintain Hong Kong's reputation as an international financial centre, and avoid being regarded as a non-cooperative tax jurisdiction.
Chan Ho-lim
Acting Secretary for Financial Services and the Treasury, Hong Kong
(June 3, 2025, Legislative Council second reading speech)
Content is for reference only, not financial advice.