crypto.news
The Hong Kong government declared to the OECD Global Forum that its regulators plan to implement a crypto asset reporting framework to combat cross-border tax evasion. Regulators plan to complete the necessary legislative amendments before 2026.
In the Organization for Economic Co-operation and Development Global Forum on Transparency and Effective Exchange of Information in Tax Matters on Dec. 13, representatives from the Hong Kong government vowed to implement a framework that would make crypto asset reporting mandatory for tax calculations.
According to a press release shared on the government site, the framework is meant to improve global tax transparency and combat cross-border tax evasion. Building upon the existing reporting standards found within the region’s Automatic Exchange of Financial Account Information in Tax Matters, the crypto asset reporting framework requires tax-paying residents to report crypto accounts and transactions annually.
The government plans to complete the regulatory framework by 2026 or earlier. Meanwhile, regulators aim to start implementing the crypto asset reporting framework with relevant tax jurisdiction by 2028.
The information gathered based on the reporting framework would then be shared to tax authorities with relevant knowledge on crypto assets from different countries to ensure fair and effective global implementation of the framework.
According to the release, Hong Kong has automatically exchanged financial account information with partner tax jurisdictions annually since 2018. The relevant tax authorities would then use the information for tax assessments and to detect and combat tax evasion.
Secretary for Financial Services and the Treasury in Hong Kong, Christopher Hui said that implementing the crypto asset reporting framework aligns with Hong Kong’s commitment to promoting international tax cooperation efforts and ensuring global tax transparency.
“Implementing the reporting framework is vital to maintaining Hong Kong’s reputation as an international financial and business center and reflects Hong Kong’s reputation as a responsible tax jurisdiction,” said Hui.
Moreover, Hui ensured that regulators will take into consideration input from relevant stakeholders and the public when preparing the necessary legislative amendments.
As previously reported by crypto.news, Hong Kong regulators are currently looking into ways to accelerate the process of creating crypto regulations to keep up with the rapidly growing industry.