Hong Kong Expands Crypto Tax Reporting to 8,000 Financial Institutions

New Reporting Requirements Take Shape

The Inland Revenue (Amendment) Bill 2026 brings Hong Kong in line with global standards for crypto tax information exchange. The legislation targets Reporting Crypto-Asset Service Providers, or RCASPs, that meet specific nexus conditions in the jurisdiction.

These providers must register through a dedicated CARF Portal, perform customer due diligence, and submit annual reports on transactions. Obligations include collecting user identification details and recording crypto transfers, crypto-to-fiat conversions, and crypto-to-crypto trades.

Legislative Council member Chan Wai-man noted that the changes will bring around 8,000 additional financial institutions under the reporting rules. Authorities have already collected more than HK$100 million in back taxes and penalties related to crypto assets from 2018 to 2025.

Timeline and Scope of CARF Implementation

Rules are set to apply from January 1, 2027, with the first automatic exchange of information with partner jurisdictions planned for 2028. The framework follows the OECD’s Crypto-Asset Reporting Framework introduced in 2023.

Covered entities include crypto exchanges, brokers, market makers, dealers trading directly with customers, and operators of crypto ATMs. Businesses that facilitate exchanges between crypto assets or between crypto and fiat currencies fall within scope.

Exclusions apply to central bank digital currencies, certain electronic money products, and assets not typically used for payment or investment purposes.

Stablecoin Developments Proceed in Parallel

Hong Kong continues work on regulated stablecoin issuance. The Hong Kong Monetary Authority granted licenses to two entities selected from 36 applicants: HSBC and Anchorpoint Financial, a joint venture involving Standard Chartered, Hong Kong Telecom, and Animoca Brands.

Both plan to issue Hong Kong dollar-pegged stablecoins, with launches expected between mid and late 2026. HSBC intends to integrate its stablecoin with its PayMe mobile payment application.

Additional Licensing Measures for Virtual Assets

Separate proposals address licensing for virtual asset advisory and portfolio management services. The Financial Services and Treasury Bureau and the Securities and Futures Commission completed a consultation on these categories.

Firms providing advice or market analysis without holding client assets would need to maintain HK$100,000 in liquid capital. Those managing client assets face requirements of HK$5 million in paid-up capital and HK$3 million in liquid capital.

The CARF measures form part of broader efforts to establish structured oversight for crypto-related activities in the jurisdiction, joining similar steps taken in places such as Singapore, Japan, and the European Union.

The framework requires platforms to set up accounts with the tax department by January 31 each year and maintain compliance even after business cessation.