As the recent surge in Bitcoin due to Trump's election, the price of Bitcoin has reached a high of over $93,000 per coin, and the overall cryptocurrency market capitalization has exceeded $3 trillion (about $100 trillion NTD). The bullish market sentiment has raised concerns among Taiwan's legislators, who have initiated discussions on the taxation of cryptocurrency transactions and investments. The Ministry of Finance has responded that it will propose relevant transaction income tax regulations within three months and submit them to the Finance Committee for review.
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ToggleCurrent Tax Law: Cryptocurrencies Need to be Taxed According to Law
Currently, virtual asset operators who have completed tax registration in Taiwan have already paid business tax and corporate income tax according to the law.
For individuals, cryptocurrencies in Taiwan are classified as digital assets, not currency. The territorial principle is adopted, and if the transaction occurs within the territory, the transaction income is subject to property transaction income tax. It will be taxed according to Article 14, Paragraph 1, Item 7 of the Income Tax Act, and the transaction selling price minus the original purchase cost and related transaction fees will be the property transaction income. When users withdraw fiat currency to their bank accounts from a Taiwan cryptocurrency exchange, it is considered a realization of gains and losses, which meets the requirement of paying taxes on cryptocurrency property transactions, and should be reported when filing the annual consolidated income tax return in May. Therefore, it is recommended to keep relevant transaction records as evidence for the future. If the transaction occurs overseas, the income needs to be included in overseas income and the minimum tax regime, such as remitting from an overseas exchange to Taiwan, which is considered overseas income.
Tax Transparency: Recommend Honest Reporting
Many investors mistakenly believe that it is currently difficult to track cryptocurrency transactions, but Peng Yunxian, the founder of Taiwan's cryptocurrency exchange HOYA BIT, said that there are actually relevant coin flow tracking tools that can be used, combining bank deposit and withdrawal records and exchange transaction records to trace back each transaction. In addition, the Financial Supervisory Commission has announced that the exchange operators who have completed the declaration of anti-money laundering statements all follow the KYC (Know Your Customer) real-name system principle. Therefore, Peng Yunxian, the founder of Taiwan's cryptocurrency exchange HOYA BIT, recommends that investors should honestly report their income to avoid legal risks due to concealing income.
Future Changes: Will a More Friendly Tax System be Introduced?
The Ministry of Finance has promised to propose a taxation plan within three months, but currently, virtual currency operators are under the supervision of the Financial Supervisory Commission, and with the establishment of the Taiwan Virtual Asset Business Association this year, and the future implementation of the registration system, there may be an opportunity to amend the law and reposition cryptocurrency transactions as financial product transactions. If the current securities transaction tax rate (0.3%) can be referenced, this not only may reduce the tax burden on investors, but also stimulate more capital inflows into the market, further strengthening Taiwan's competitiveness in the cryptocurrency field.
Peng Yunxian, the founder of Taiwan's cryptocurrency exchange HOYA BIT, said:
Investors should operate within the compliance framework, and at the same time expect the government to formulate a fair tax policy that can promote market growth.
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