Hong Kong to Introduce Crypto-Asset Reporting Bill for Enhanced Tax Transparency in 2026.

Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 to be gazetted

The Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026, which aims to implement the Crypto-Asset Reporting Framework (CARF) and the latest amendments to the Common Reporting Standard (CRS) developed by the Organisation for Economic Co-operation and Development (OECD) in Hong Kong, will be gazetted on May 22 and introduced into the Legislative Council for first reading on June 3.

In light of the rapid development of digital asset markets in recent years, the OECD published CARF in 2023 to provide for the automatic exchange of tax information on crypto-asset transactions with relevant jurisdictions on an annual basis, and incorporated into the CRS new digital financial products and enhanced requirements regarding reporting and due diligence.

The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "Hong Kong has been supporting international efforts in enhancing tax transparency and combating cross-border tax evasion. To fulfil our international obligations and support international efforts in combating cross-border tax evasion, we propose amending the Inland Revenue Ordinance (Cap. 112) for implementing CARF and the amended CRS. This is of paramount importance in maintaining Hong Kong's reputation as an international financial and commercial centre.

"CARF will be implemented next year. Crypto-asset service providers with reporting nexus with Hong Kong will be required to register with the Inland Revenue Department (IRD), and fulfil requirements including due diligence, return filing and record keeping. Subject to the implementation progress of the relevant jurisdictions, we plan to commence the automatic exchange of tax information on crypto-asset transactions with them starting from 2028, and implement the amended CRS in the same year. Hong Kong will implement the automatic exchange of tax information with suitable partners on the premise of data confidentiality and security and on a reciprocal basis."

The Government conducted a public consultation between December last year and February this year. Stakeholders, including professional bodies and the financial and crypto-asset sectors, generally support the above legislative proposals. The Government has duly taken into account their views on the implementation details when drafting the Bill.

To assist the industry in adapting to the new requirements, the IRD will issue relevant guidance in due course and provide technical support to the industry and address their enquiries.

Since 2018, Hong Kong has been conducting automatic exchange of financial account information with partner jurisdictions on an annual basis, in accordance with the CRS developed by the OECD. This enables the relevant tax authorities to conduct assessment on their tax residents, in order to detect and combat tax evasion.

Source: AI-found images

Incoming passenger convicted and jailed for possessing duty-not-paid cigarettes

An incoming female passenger was sentenced to eight weeks' imprisonment and fined $1,000 by the Fanling Magistrates' Courts today (May 20) for possessing duty-not-paid cigarettes and failing to declare them to Customs officers, in contravention of the Dutiable Commodities Ordinance (DCO).

Customs officers intercepted an incoming 45-year-old female passenger at the Lo Wu Control Point yesterday (May 19) and seized 861 duty-not-paid cigarettes with an estimated market value of about $3,530 and a duty potential of about $2,846 from her personal baggage. The female passenger was subsequently arrested.

Customs welcomes the sentence. The custodial sentence has imposed a considerable deterrent effect and reflects the seriousness of the offences.

Customs reminds members of the public that under the DCO, cigarettes are dutiable goods to which the DCO applies. Any person who imports, deals with, possesses, sells or buys illicit cigarettes commits an offence. The maximum penalty upon conviction is a fine of $2 million and imprisonment for seven years.

Members of the public may report any suspected illicit cigarette activities to Customs' 24-hour hotline 182 8080 or its dedicated crime-reporting email account (crimereport@customs.gov.hk) or online form (eform.cefs.gov.hk/form/ced002).

Source: AI-found images