Hong Kong AEOI Updates – The digital asset market in Hong Kong and the requirements on global tax transparencies

On 13 December 2024, the Hong Kong Government informed the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) of the Organisation for Economic Co-operation and Development (OECD) of Hong Kong's commitment to implementing the Crypto-Asset Reporting Framework (CARF) for enhancing international tax transparency and combating cross-border tax evasion.

Mr. Christopher Hui, the Secretary for Financial Services and the Treasury, said that “CARF is the latest global standard on tax transparency. Its implementation is crucial for maintaining Hong Kong's reputation as an international financial and business centre. It also reflects Hong Kong's ongoing efforts in promoting international tax co-operation as a responsible tax jurisdiction.”¹

Hong Kong aims to put in place the necessary local legislative amendments by 2026 and commence the first automatic exchanges with relevant jurisdictions from 2028.

In our article, we have highlighted three types of market players in Hong Kong which should pay attention to the pre- and post-implementation of the amended CRS and CARF in Hong Kong.

These three types of market players are:

(1) Virtual Asset Trading Platforms (VATPs) and crypto wallets
(2) Funds investing in crypto-assets
(3) Tokenization of traditional fund units

Market players dealing with crypto-assets directly or crypto-related products should act quickly in anticipation of the amended CRS and CARF.

¹ Hong Kong commits to implementing Crypto-Asset Reporting Framework, 13 December 2024, The Government of the Hong Kong Special Administrative Region Press Release,
https://www.info.gov.hk/gia/general/202412/13/P2024121300491.htm