Hong Kong's purchase of Bitcoin will be taxed! The government has committed to implementing the "encryption asset reporting framework" and completing legislative amendments within two years.

The Hong Kong government announced last week on the 13th that it will implement the encryption asset reporting framework (reporting framework) to enhance international tax transparency and combat cross-border tax evasion activities, and plans to complete legislative amendments by 2026 or earlier. (Background: Hong Kong's 'Stablecoin Bill' Draft: Licensing Required for These Three Fiat Currency Businesses) The Hong Kong government announced on December 13 that it will implement the encryption asset reporting framework to enhance international tax transparency and combat cross-border tax evasion activities: The government today informed the Organisation for Economic Co-operation and Development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) that Hong Kong is committed to implementing the encryption asset reporting framework (reporting framework) to enhance international tax transparency and combat cross-border tax evasion activities. It is planned to complete the legislative amendments by 2026 or earlier. The Hong Kong government further stated that given the rapid development of the encryption asset market, the OECD published the reporting framework in June 2023 to ensure global tax transparency. As an extension of the current 'Common Reporting Standard for Automatic Exchange of Financial Account Information on Tax Matters', the reporting framework will establish a similar mechanism for users or beneficial owners of encryption assets to automatically exchange tax information related to encryption asset accounts and transactions with their tax jurisdictions of residence on an annual basis. At the same time, to ensure the fair and effective implementation of the reporting framework globally, the Global Forum has invited all relevant industry players in the encryption asset industry and tax jurisdictions identified as directly relevant to the reporting framework (including Hong Kong) to implement the reporting framework. In addition, the Hong Kong authorities also stated that their preliminary plan is to complete the necessary local legislative amendments by 2026 or earlier, and starting from 2028, to conduct the first automatic data exchange with relevant tax jurisdictions under the reporting framework: Hong Kong is committed to implementing the reporting framework with suitable partners on the basis of reciprocity, and these partners must meet the standards for safeguarding data confidentiality and security. Taking into account the latest timetable established by the Global Forum, the government's preliminary plan is to complete the required local legislative amendments by 2026 or earlier, and starting from 2028, to conduct the first automatic data exchange with relevant tax jurisdictions under the reporting framework. Regarding this commitment, Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, said: The reporting framework is the latest global standard for tax transparency. Its implementation is crucial for maintaining Hong Kong's reputation as an international financial and business center and reflects Hong Kong's commitment as a responsible tax jurisdiction to promote international tax cooperation. European ESMA issues final implementation guidelines for MiCA On the regulatory front, according to CoinDesk, the European Securities and Markets Authority (ESMA) also published the final implementation guidelines for the European Union's MiCA (Markets in Crypto-assets) Regulation on the 17th, providing detailed information on the solicitation of reverse, financial instruments that cryptocurrencies may constitute, and technical standards to prevent market abuse. The aim is to help EU member states coordinate local laws with the MiCA Regulation to ensure comprehensive implementation of the Regulation across the EU. It is understood that the MiCA Regulation, proposed by the EU in 2019, is being implemented in two stages, with the first stage officially taking effect on June 30 this year, mainly requiring stablecoin issuers to obtain operating licenses; and the second stage, which will officially take effect at the end of this month, involves encryption asset service providers (CASPs), including exchanges, wallet providers, and custodians, among others. MiCA requires these companies to be registered in at least one EU country and obtain operating licenses. Further reading: EU MiCA Regulation to take effect at the end of the month, but nearly 25% of member states have not completed regulatory frameworks, calling for another six-month delay Related reports: USDC issuer Circle plans to enter Hong Kong: waiting for stablecoin regulations to be finalized, backed by a large mainland market Buy funds with stablecoins! Hong Kong Victory Securities establishes 'Victory VSG' virtual asset multi-strategy fund Hong Kong Virtual Money Regulation: What is the difference between VASP and VATP, and do they both require licenses? <Hong Kong to Tax Bitcoin! Government Commits to Complete 'Encryption Asset Reporting Framework' Legislative Amendments within Two Years> This article was first published on BlockTempo