TL;DR
- Long-term personal investment: Hong Kong has no capital gains tax → no tax.
- Frequent trading treated as a business: subject to profits tax (16.5% corporate, standard rates personal).
- Companies receiving crypto as income: treated as income, profits tax applies.
- Wages or fees paid in crypto: market value at receipt is salaries-tax assessable.
See the IRD's DIPN 39 (revised) for guidance on digital assets.
No capital gains tax
Unlike the US, Hong Kong does not levy capital gains tax. Casual, long-term personal crypto investments typically aren't taxed.
The line between "occasional" and "business" follows the Badges of Trade:
- Frequency of transactions
- Holding period
- Speculative arrangements
- Manner of acquisition
- Subsequent improvement / processing
- Motive
High-frequency trading with significant capital may be deemed carrying on a business and become taxable.
Companies holding / receiving
- Accepting crypto for goods or services: book the FMV at receipt as revenue.
- Treasury holdings: trading-style realisations are taxable as profits.
Mining / staking / airdrops
- Generally treated as income or business profits depending on the recipient.
- Subsequent price moves follow the "investment vs business" framework.
Record-keeping
Regardless of tax status, keep records for at least 7 years:
- OTC receipts with TXID
- Exchange statements
- Chain wallet address list
Talk to an accountant when
- Filing your annual return.
- A single trade exceeds 30% of your yearly income.
- Earning recurring passive crypto income (lending / staking).
- Paying employees in crypto.
This article is general information only and not tax advice. Consult a licensed accountant for your situation.
