Hong Kong’s financial industry representatives are urging policymakers to soften parts of the planned crypto tax reporting regime as the city prepares to adopt new international standards. While backing stronger transparency in principle, the group warns that rigid implementation could create operational strain and legal risks for local institutions.
At the center of the discussion is the Crypto Asset Reporting Framework (CARF), a global standard designed to enable automatic cross-border tax information sharing for crypto asset users. The framework works alongside updates to the Common Reporting Standard (CRS), which already governs traditional financial accounts. Hong Kong is among the jurisdictions committed to rolling out CARF, with first data exchanges expected later in the decade.
The industry body supports measures such as mandatory registration of crypto service providers and expanded transaction reporting. However, it is calling for lighter treatment for firms with no reportable activity, stronger safeguards for personal data, and more flexible rules allowing record-keeping duties to be transferred to regulated third parties if companies shut down.
Concerns have also been raised over uncapped penalties and personal liability for directors, which could discourage participation even when firms act in good faith. The group is advocating for clear penalty limits and legal protections to balance compliance with practicality.
The debate comes as Hong Kong continues positioning itself as a regulated digital asset hub, seeking to align global tax standards with its ambitions for sustainable crypto market growth.
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This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.