A Brief Overview of the 2026 Tax Changes
A Brief Overview of the 2026 Tax Changes
Author: Merton Lam
CEO, Crypto HK
Hong Kong’s Inland Revenue (Amendment) (Tax Reporting Framework for Crypto-Assets and Amendments to the Common Reporting Standard) Bill 2026 received its First Reading on June 3 and was passed on November 4. The key amendments involve the addition of Part 8B, comprising Sections 50M to 50Y, to the Inland Revenue Ordinance.
In simple terms, these provisions update Hong Kong’s tax reporting system and align it with the international Crypto-Asset Reporting Framework (CARF). Specifically, crypto-asset service providers and financial institutions subject to the revised Common Reporting Standard (CRS) will be required to verify their customers’ tax residences and submit information—including customers’ names, addresses, tax identification numbers, and aggregated transaction details—to the local tax authorities.
In Europe, data collection under DAC8 commenced on January 1, 2026. With the amendments now passed, Hong Kong-based institutions will be required to begin collecting customer information from January 1, 2027, with the first reporting to overseas tax authorities taking place in 2028. There will be no retrospective reporting requirement. This means that transactions completed before that date in which customers purchase cryptocurrency with fiat currency at a physical shop and then transfer it directly to their own wallets will not fall within the scope of the first reporting cycle. Crypto HK is not subject to this reporting obligation and will not report records of these transactions.
One of the main concerns among cryptocurrency investors is whether the passage of the amendments will introduce any new taxes.
For Hong Kong residents whose activities are conducted entirely within Hong Kong, these tax amendments will have no direct impact. The amendments simply improve the tax reporting mechanism; they do not introduce any new taxes. In Hong Kong, ordinary individuals are generally not required to pay tax on capital gains or gains from financial market investments, provided they are not carrying out such activities as a business.
In other words, although the Inland Revenue Department may have the means to obtain information about your transactions and profits, this does not mean that you will be taxed on those gains. This would only change if Hong Kong were to introduce a capital gains tax in the future. Of course, once the tax authorities have access to such information, they may still examine whether the gains should be classified as business income.
However, these amendments may raise certain concerns for foreign residents in Hong Kong, Hong Kong people who have emigrated, and those planning to move overseas. Depending on the tax rules in their respective jurisdictions, they may be liable to pay tax on cryptocurrency gains.
This is particularly relevant to Hong Kong residents who are planning to emigrate, as well as those who have already moved overseas but have not yet obtained citizenship in their new country. Since overseas tax authorities may already be able to obtain relevant financial information through the Crypto-Asset Reporting Framework, failure to declare such assets and gains could affect the progress of their citizenship applications, or even result in outright rejection.
Finally, Crypto HK would like to remind readers that paying taxes is a civic responsibility. Even though cryptocurrency transactions involving cash purchases are currently outside the scope of the reporting framework, we still encourage everyone to make full and accurate tax declarations and do their part for the community in which they live.