Hong Kong is tightening its tax-transparency regime. On 22 May 2026, the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 was gazetted, and it received its First Reading in the Legislative Council on 3 June 2026. Once enacted, the Bill will introduce two parallel reporting frameworks that reshape compliance obligations for companies, financial institutions, and crypto-asset service providers operating in the city.

CARF: Crypto-Asset Reporting from 1 January 2027

The Crypto-Asset Reporting Framework (CARF) is an OECD-developed standard adopted by Hong Kong to close the reporting gap on crypto-asset transactions. Under CARF, any individual or entity that, as a business, effectuates exchange transactions in crypto-assets for or on behalf of customers — including crypto exchanges, brokers, dealers, and ATM operators — is classified as a Reporting Crypto-Asset Service Provider (RCASP). RCASPs meeting Hong Kong nexus criteria (tax residency, incorporation, management, or a regular place of business in the city) must register with the Inland Revenue Department (IRD), conduct due diligence on users, and annually report prescribed information such as tax residency, taxpayer identification numbers, and aggregate transaction values.

The scope covers virtually all crypto-assets — both fungible and non-fungible tokens — with narrow carve-outs for central bank digital currencies, specified electronic money products, and crypto-assets that cannot be used for payment or investment. CARF reporting requirements take effect from 1 January 2027, with the first automatic exchange of information targeted for 2028.

Amended CRS (CRS 2.0): Broader Financial-Account Reporting from 1 January 2028

Running alongside CARF, the amended Common Reporting Standard (CRS 2.0) expands the existing CRS framework in three key ways. First, it brings new digital financial products — including digital money products, derivatives referencing crypto-assets, and investment entities holding crypto-assets — within the CRS reporting scope. Second, Reporting Financial Institutions (RFIs) must now supply additional data: whether valid self-certification was obtained, the roles of controlling persons, account types, and the number of joint account holders. Third, due-diligence rules are refined, requiring entity-account holders to self-certify all jurisdictions of tax residence and tightening AML/KYC standards for new entity accounts.

CRS 2.0 takes effect on 1 January 2028. A separate Enhanced Administration Bill, gazetted on 27 March 2026, already upgrades CRS enforcement — mandating RFI registration with the IRD, strengthening record-keeping, and raising penalties — from 1 January 2027, a year ahead of the amended CRS content rules.

Compliance Impact for Hong Kong Companies

For companies registered in Hong Kong, the changes are far-reaching. Businesses that deal in crypto-assets — even incidentally, such as accepting crypto payments or holding crypto on balance sheets — should assess whether they qualify as RCASPs and prepare registration and due-diligence workflows before the 2027 deadline. Financial institutions must update CRS procedures to accommodate the expanded reporting fields and new product categories. Crucially, to avoid dual reporting, gross proceeds from crypto-asset sales or redemptions will be reported under CARF rather than CRS 2.0 where both regimes overlap.

The IRD has published dedicated webpages on CARF (www.ird.gov.hk/e_carf) and amended CRS (www.ird.gov.hk/e_crs), including due-diligence flowcharts, FAQs, and the full text of the Amendment Bill. Professional advisors from KPMG, PwC, and EY have all flagged the compressed implementation timeline and urged in-scope entities to begin planning immediately.

Bottom Line

Hong Kong's CARF and CRS 2.0 reforms signal the city's full alignment with OECD tax-transparency standards. Companies and service providers that delay compliance preparations risk penalties and reputational harm when the new regimes kick in. The legislative process is underway — and the clock is ticking toward 1 January 2027.