“IF A BUSINESS IS GONE, WHY MUST THE BURDEN LIVE ON?”
Are OECD crypto reporting rules too heavy for Hong Kong’s digital asset market? The Hong Kong digital asset industry has asked the government to make practical amendments to the OECD’s digital asset Asset Reporting Framework (CARF) before it is fully implemented.
Although the sector is in favour of increased tax transparency, it feels that certain regulations could put severe operational and legal burden on businesses if they are implemented strictly.
Certain CARF laws may subject businesses and their directors to infinite fines and personal legal culpability, according to a trade association for financial and digital currency professionals.
The group claims that this would deter participation, particularly from smaller businesses or those with little involvement in digital assets. Industry executives contend that businesses operating in good faith ought to be protected by the law and that fines need to be fair and clearly capped.
Data protection is another important issue. Sensitive consumer data, such as transaction records and tax residency, must be gathered and shared in accordance with CARF. Stronger security measures are required, according to the industry, to stop data breaches or misuse that might endanger institutions and investors alike.
Can compliance continue without trapping former directors in ongoing risk? Requirements for record-keeping are also being examined. According to the present idea, businesses might have to keep documents even after they cease operations.
In order maintain compliance without putting former directors or dissolved enterprises at long-term risk, the industry recommends letting regulated third-party suppliers assume this function.
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