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Hong Kong to Enact Crypto Asset Reporting Framework by 2026
In a recent announcement, it has been revealed that the government of Hong Kong plans to introduce the Crypto-Asset Declaration Framework (Declaration Framework) by 2026. This new framework aims to enhance international tax transparency and combat cross-border tax evasion in the rapidly growing crypto market.
The government has informed the Organization for Economic Co-operation and Development (OECD) Global Forum on Transparency and Effective Exchange of Information in Tax Matters that it is committed to implementing this framework before 2026. Furthermore, Hong Kong will begin automatic exchange of information with relevant tax jurisdictions under the reporting framework starting from 2028.
The OECD announced a reporting framework in June 2023 as a response to the increasing adoption of cryptocurrencies worldwide. A recent report showed that the market capitalization of Asia’s first batch of Virtual Asset spot ETFs listed in Hong Kong has grown by an impressive 70% since its release in April, indicating a significant rise in interest and activity within the crypto space.
According to reports, this new framework will be aligned with the existing Common Reporting Standard for the Automatic Exchange of Financial Account Information in Tax Matters. It aims to introduce a similar method to automatically exchange crypto-asset accounts and transactions on an annual basis in tax jurisdictions where crypto-asset users or controllers are tax residents.
As part of its commitment to implementing this reporting framework, Hong Kong has been invited by the Global Forum to participate and collaborate with other relevant parties, focusing on the crypto-asset industry. The government believes that this joint effort will ensure a fair execution of the reporting framework globally.
In addition to this plan, Secretary for Financial Services and the Treasury, Mr Hui Ching-yu, emphasized the importance of implementing this Reporting Framework in maintaining Hong Kong’s reputation as an international financial and business center.
Source: http://www.cryptonewsz.com
