Taiwan's Cryptocurrency tax method for buying and selling is released! Non-securities currencies are subject to comprehensive income tax. Expert: Remember to keep the original cost documents.

According to the Economic Daily News, the Ministry of Finance has been discussing tax regulations on cryptocurrency income. Individuals or businesses that buy and sell virtual currencies with the nature of securities should include the 'securities trading gains and losses' in their taxable income. As for virtual currencies with 'non-securities' nature, individuals should include the net gain after deducting the cost in their comprehensive income tax, while businesses should include it in their income and pay corporate income tax according to the law. The points of contention include what constitutes non-regular trading and the criteria for determining whether individual virtual currencies have the nature of securities, which are also worth following up on.

Virtual currencies of a securities nature are classified as securities trading gains and losses, and individuals are tax-exempt

In the written report submitted to the Legislative Yuan by the Ministry of Finance, virtual currencies are divided into 'securities nature' and 'non-securities nature' in the 'Cryptocurrency Income Tax Regulations'.

Buying and selling virtual currencies with the nature of securities, the trading gains and losses are subject to the 'securities trading gains and losses' as stipulated by the income tax law. For individuals, the securities exchange tax has been suspended since January 1, 2016. However, profit-making enterprises should include the gains and losses in the basic income according to the regulations of the basic income tax amount.

Non-securities virtual currency belongs to property exchange

In the 'non-securities nature' part, the Ministry of Finance stated that the income from individual non-regular trading of non-securities nature virtual currency is considered 'property exchange gains' as defined in the Income Tax Act. According to the Ministry of Finance's explanation, the calculation method for property exchange gains is to subtract the original cost and related expenses from the selling price at the time of sale, and include it in the total comprehensive income for income tax assessment.

The buying and selling of virtual currencies that are not of a securities nature by profit-making enterprises shall be calculated in the same manner as mentioned above, and the income shall be subject to corporate income tax in accordance with the law.

Whether digital assets have securities attributes is still controversial.

One of the controversies is how to define whether it has securities nature. Similar issues have occurred in the United States. In the past, the SEC has prosecuted different cryptocurrencies for violating securities laws several times, but Taiwan does not have the Howey Test like the United States. Securities Transaction Law Article 6:

The term 'securities' as used in this Act refers to

government bonds

Company Stock

corporate bonds

Other valuable securities approved by the competent authority.

The certificates of subscription rights for new shares, certificates of equity for new shares, and payment certificates or certificates indicating their rights for various valuable securities mentioned in the preceding paragraph shall be regarded as valuable securities. Valuable securities referred to in the preceding two paragraphs, which have not been printed to represent their rights, shall also be regarded as valuable securities.

The Ministry of Finance rolls out a follow-up tax investigation method. Remember to keep the deposit and withdrawal documents.

According to the statistics of the Ministry of Finance, as of December 13, 2024, a total of 129,196,958 yuan of undeclared income from virtual currency trading was discovered, and a total of 34,036,530 yuan of additional taxes and fines were imposed. The Ministry of Finance also stated that it will cooperate with the continuous review of data collection methods and scope for emerging trading types to improve audit efficiency and impose taxes and donations in accordance with the law. Experts also remind that documents that can prove the original cost should be retained for deposits and withdrawals.

This article Taiwan Cryptocurrency trading tax method is out! Non-securities currency is included in comprehensive income tax, experts: Remember to keep the original cost documents first appeared in Chain News ABMedia.