Hong Kong: Draft legislation to strengthen administrative framework for CRS regime
Mandatory registration, updated record-keeping, and strengthened sanctions
The Hong Kong government on March 27, 2026, published draft legislation designed to strengthen the administrative framework of the common reporting standard (CRS) in Hong Kong. The new administrative measures are scheduled to become effective from January 1, 2027, subject to enactment.
Background
Following a consultation paper issued in December 2025, the Inland Revenue (Amendment) (Automatic Exchange of Information) Bill 2026 was published. The bill aims to address concerns identified by the OECD during its peer review process and was introduced into the Legislative Council on April 1, 2026.
Summary of strengthened measures
- Mandatory registration: All reportable financial institutions will be required to register on the AEOI portal, even if they do not have reportable accounts. The deadline for initial registration for existing reportable financial institutions has been extended to March 31, 2027.
- Updated record-keeping: Reportable financial institutions must keep due diligence and CRS return records for six years from the end of the relevant reporting period or the return due date, whichever is later. These requirements will also apply to entities that have ceased to be reportable financial institutions but have not been dissolved.
- Strengthened sanctions: The bill introduces new penalties for non-compliance, including fines for failure to register, providing incorrect information, and not notifying the IRD of cessation or dissolution. An "administrative penalty" mechanism, similar to the profits tax regime's "additional tax," is also proposed for certain offenses committed without a reasonable excuse. For instance, failing to notify the IRD of inaccuracies in a CRS return could result in a fine of the higher of HK$10,000 or HK$1,000 multiplied by the number of affected accounts.
Read a May 2026 report prepared by the KPMG member firm in Hong Kong