Hong Kong is progressing with its efforts to align with global standards for crypto-asset reporting by initiating a public consultation on implementing the Crypto-Asset Reporting Framework (CARF). This move highlights the region’s commitment to enhancing transparency and combating cross-border tax evasion through international cooperation.
Key Takeaways
- •Hong Kong’s government is seeking public feedback on adopting CARF and revising tax reporting standards.
- •The initiative aims to promote international tax cooperation and prevent tax evasion.
- •Hong Kong has been exchanging financial account information with global partners since 2018.
- •Widespread international adoption of CARF is underway, with over 48 countries committed to its implementation by 2027.
Local and International Regulatory Developments
Hong Kong’s financial authorities announced the consultation, which seeks input on how to best implement CARF—a key component of the Organisation for Economic Co-operation and Development (OECD)’s international tax transparency initiatives. The move is consistent with Hong Kong’s long-standing practice of exchanging financial information with partner jurisdictions since 2018, reinforcing its standing as a region committed to maintaining compliance standards.
Christopher Hui, Hong Kong’s Secretary for Financial Services and the Treasury, emphasized that adopting CARF demonstrates the city’s dedication to promoting global tax cooperation and curbing cross-border tax evasion. The government also invites feedback on integrating the Common Reporting Standard (CRS), another OECD-led initiative aimed at standardizing tax reporting processes worldwide.
Global Adoption of CARF Gains Momentum
The international community has shown strong support for CARF. In early November, reports indicated that 47 national governments had pledged to adopt the framework by 2027, with Brazil among those considering joining. Meanwhile, some nations, including Switzerland, have delayed full implementation until 2027, and others, such as the US, are reviewing legislative proposals to join the program.
The OECD maintains a list showing 48 countries committed to adopting CARF and 53 who have signed the Multilateral Competent Authority Agreement, enabling automatic cross-border data exchange. In parallel, Cayman Islands’ foundation company registrations spiked 70% year-over-year, with legal experts suggesting that CARF’s current design may exclude certain structures—highlighting ongoing regulatory refinements and potential avenues for privacy-conscious entities.