Proposal · Effective · Applies to VASPs, Banks, Fund managers
The government gazetted the Inland Revenue (Amendment) (Crypto-Asset Reporting Framework and Amended Common Reporting Standard) Bill 2026 on 22 May and introduced it into the Legislative Council on 3 June. Crypto-asset service providers with a reporting nexus to Hong Kong would register with the Inland Revenue Department and carry out due diligence, return filing and record keeping. CARF would apply from 2027, with exchanges with partner jurisdictions from 2028; the amended Common Reporting Standard would follow in 2028.
Why it matters: Every crypto platform with a Hong Kong nexus, licensed or not, would have to register with the tax authority, which gives the IRD its own list of crypto businesses alongside the SFC's. R.M.
The Crypto-Asset Reporting Framework (CARF). A new Part 8B (sections 50M to 50Y) applies the OECD’s CARF to reporting crypto-asset service providers (RCASPs). These are businesses that effectuate exchanges of crypto-assets for customers as a dealer, broker, intermediary or platform (para 9). An RCASP is caught if it is tax resident, incorporated, managed or has a regular place of business in Hong Kong (para 11). Three kinds of transaction are reportable: crypto to fiat, crypto to crypto, and transfers (para 10). Central bank digital currencies (CBDCs) and specified electronic money products are excluded from CARF and go into the Common Reporting Standard (CRS) instead (para 8).
Registration. Every RCASP that meets a nexus test must register on the IRD’s CARF portal, whether or not it has anything to report (para 14(a)). The IRD says it will use the Securities and Futures Commission’s (SFC) list of trading platforms and business registration records to find firms that haven’t registered (footnote 13).
Enforcement. RCASPs keep due diligence records for six years, even after dissolution (para 14(c)). The IRD gets powers to inspect premises and direct changes to systems (para 14(e)). Offences carry penalties, and an administrative penalty can be used in place of prosecution (paras 14(f) and (g)).
Amended CRS. Banks and other reporting financial institutions will report CBDC and e-money accounts, derivatives on crypto-assets, and funds that invest in crypto-assets (para 15(a)). Gross proceeds already reported under CARF need not be reported again under CRS (para 16).
Implications
The registration duty is the significant part. It does not depend on SFC licensing, so a firm with a regular place of business in Hong Kong falls within it whether or not it holds a licence. The IRD becomes a second agency that holds a register of crypto businesses and can inspect them.
For licensed platforms the cost is mainly operational: tax-residence self-certifications from all new users, from existing users within 12 months (footnote 11), and an annual return. Banks that hold tokenised deposits or e-money for customers will need to extend their CRS systems.
The Brief says single-currency stablecoins that meet the conditions count as specified electronic money products and so fall under CRS, while multi-currency stablecoins fall under CARF (footnote 22). Whether a licensed Hong Kong dollar stablecoin held in a self-custody wallet is reported by anyone isn’t addressed.
Elsewhere in Asia
Singapore made its CARF regulations in August 2026, with the same 2027 start. India brought crypto-assets, CBDC and e-money into its CRS rules in March 2026, and its section 509 rules require CARF-style reporting from calendar year 2026, a year earlier.
What to watch
A Bills Committee is scrutinising the Bill. The government’s presentation to it in June says it aims to pass the Bill by the end of 2026, ahead of a 1 January 2027 start for CARF.