Key Takeaways
- "Do cryptocurrencies need to be taxed?" is a hot topic for the 2025 tax season. Chung Dian-Yan, Partner Lawyer at KPMG Legal, emphasizes that the critical focus is how regulatory authorities will define cryptocurrencies.
- A January report by Taiwan’s Ministry of Finance consolidates existing tax laws but introduces no dedicated crypto taxation framework yet.
- Investors are advised to retain transaction records (costs/data) to comply with potential future tax rules.
Have you filed your taxes? If so, you might have wondered: "Do cryptocurrency transactions need to be declared?"
While Taiwan’s "Crypto Asset Special Act" remains pending, the Ministry of Finance’s January 2025 report on cryptocurrency taxation offers preliminary guidance. Chung Dian-Yan, Partner Lawyer at KPMG Legal, notes this report summarizes current tax laws but highlights unresolved regulatory nuances.
KPMG’s Chung Dian-Yan: How Cryptocurrencies Are Defined Determines Tax Liability
With Taiwan’s Virtual Asset Management Act expected by mid-2025, tax enforcement on crypto transactions will intensify. Chung identifies regulatory definitions as the pivotal factor:
- Securities-like Cryptocurrencies: Classified similarly to stocks/bonds, these may be exempt from capital gains tax under current laws (Income Tax Act Article 4-1).
Example: Tokens meeting securities criteria per FSC regulations.
Caveat: Bitcoin (BTC) and Ethereum (ETH) remain unclassified as securities by Taiwan’s FSC. - Non-Securities Cryptocurrencies: Taxed as miscellaneous income or property transactions, akin to foreign currency trades.
👉 What’s the latest on stablecoin taxation?
Chung also flags stablecoin arbitrage gaps—price disparities across exchanges could trigger taxable "property transaction gains," mirroring forex rules.
Tax Audits Can Retrospectively Cover 7 Years! Preserve Your Transaction Proofs
"Boundless innovation spawns boundless obligations," Chung cautions. While blockchain immutability ensures transaction integrity, tax authorities may audit back seven years.
Actionable Advice:
Maintain detailed records of:
- Acquisition costs
- Trade timestamps
- Wallet addresses
- Use tools like OKX’s tax reporting suite for automated tracking.
FAQ Section
Q1: How are crypto-to-crypto trades taxed in Taiwan?
A: Currently treated as barter transactions—taxable only upon conversion to fiat or goods/services.
Q2: Does mining cryptocurrency count as taxable income?
A: Yes, mining rewards are classified as miscellaneous income at fair market value upon receipt.
Q3: Can losses from crypto trading offset other capital gains?
A: Unclear under current rules; consult a tax professional for case-specific advice.
About XREX Group
Founded in 2018, XREX Group is a blockchain-powered financial institution collaborating with governments and banks to redefine finance. Its Singapore entity holds an MAS MPI license (2024), while its Taiwan subsidiary complies with AML regulations.