As cryptocurrencies gain mainstream recognition worldwide, governments are increasingly stepping up regulatory frameworks—especially in the realm of taxation. While the U.S. advances infrastructure bills that may expand crypto-related tax obligations, and Japan has had clear cryptocurrency tax rules since 2017, Taiwan is navigating its own path. In this exclusive interview, we speak with Arthur Huang, a legal expert specializing in fintech, blockchain, and digital assets, to clarify common questions about cryptocurrency taxation in Taiwan.
Who Is Arthur Huang?
Arthur Huang is a licensed attorney and Japanese-to-Chinese legal translator with deep expertise in blockchain, fintech, and startup law. He actively explores the legal implications of emerging technologies, including the metaverse and smart contracts, and is on a mission to become a "Coding Lawyer"—bridging law and technology. His insights offer a rare blend of technical understanding and legal precision.
1. Is Cryptocurrency Income Taxable in Taiwan? How Is It Classified?
👉 Discover how crypto profits could affect your tax bill—learn the rules before filing.
Arthur Huang explains:
A common misconception is that because there’s no specific crypto tax law, no taxes apply. That’s incorrect.
In practice, Taiwan’s tax authorities classify most cryptocurrencies as virtual commodities, not legal tender. The only exception is Security Token Offerings (STOs), which are treated as securities and subject to different rules.
For non-security crypto assets—like Bitcoin or Ethereum—tax treatment mirrors that of selling virtual items online (e.g., game currency). This means two main taxes may apply: income tax and value-added tax (VAT).
Income Tax: Capital Gains from Trading
When an individual buys and sells cryptocurrency at a profit, the gain is considered property transaction income. According to current guidelines:
- Profits are calculated as: sale price – acquisition cost – transaction fees
- This net gain must be included in your annual comprehensive income tax return
- Even if you use BTC to pay for goods or services and gain value, that benefit is taxable
Example: You buy 1 BTC for NT$500,000 and later trade it for goods worth NT$700,000. The NT$200,000 gain is taxable.
VAT: When Trading Becomes a Business
If you frequently trade crypto—especially with intent to profit—you may be seen as running a business. In that case:
- You’re required to register for a business license if monthly sales exceed NT$40,000
- Once registered, you must collect and remit 5% VAT on transactions
Even peer-to-peer trades can trigger VAT. Using crypto to buy goods is treated as barter trade ("goods for goods" or "goods for services"). The taxable amount is the higher of the two values exchanged.
2. Are Cryptocurrencies Transferred from Overseas Exchanges Taxable?
No—simply moving crypto from an overseas exchange to your personal wallet does not trigger taxation, as long as no sale or conversion occurs.
This transfer is viewed as a relocation of assets, not a disposal. No gain or loss is realized, so no tax is due.
However, once you sell or exchange that crypto in Taiwan, the transaction becomes taxable based on the difference between acquisition cost and sale price.
3. What About USD Withdrawn from Overseas Exchanges? Is It Tax-Free?
Withdrawing USD from platforms like FTX is different from transferring crypto.
According to Taiwan’s tax code:
- Foreign exchange transactions (e.g., selling BTC for USD on an overseas exchange) are considered overseas income
- If your total overseas income exceeds NT$1 million per year, you must report it on your tax return
Note: Reporting ≠ Paying tax. It’s a disclosure requirement.
The Basic Taxable Income System
Overseas gains fall under Taiwan’s minimum tax system (基本所得稅額). This includes:
- Overseas income over NT$1 million
- Offshore fund gains
- Life insurance payouts (when beneficiary ≠ policyholder)
- Non-cash donations
- Certain investment income
Your total basic taxable income is calculated and compared to your regular income tax. If it exceeds NT$6.7 million and results in higher liability, you may owe additional tax at a flat rate.
👉 See how global crypto traders manage cross-border taxes legally.
4. Is Holding Crypto Taxable? What If It Gains or Loses Value?
Holding crypto without selling generally does not trigger taxes—but how you acquired it matters.
Case 1: Purchased Crypto
- Price increases: No tax until sold
- Price drops: No deduction unless sold at a loss
This follows standard capital gains principles: taxation occurs upon realization (i.e., disposal).
Case 2: Mined Crypto
Mining introduces complexity:
- Is mining income taxable when received—or only when sold?
- How do you value newly mined coins with no market price?
- Can hardware depreciation or electricity costs be deducted?
Currently, Taiwan lacks clear guidance. However, international trends suggest:
- Some countries tax mined coins at fair market value upon receipt
- Others apply taxation only upon disposal
Until local authorities clarify, miners should document all costs and consult tax professionals.
5. How Are Corporate Crypto Investments Taxed?
Businesses investing in crypto follow similar rules:
- Gains from selling crypto are treated as business income
- Subject to corporate income tax (currently 20%)
- Foreign companies receiving payments in Taiwan may have taxes withheld at source
If a company uses crypto for payments or receives token-based incentives (e.g., staking rewards), those benefits may also be taxable as revenue.
6. How Does Taiwan’s Crypto Tax Framework Compare Globally?
Taiwan’s classification system—security vs. non-security tokens—is simple but incomplete.
Countries like Japan offer more mature models:
- Since 2017, Japan has clear accounting and tax standards for crypto
The Japan Virtual Currency Exchange Association (JVCEA) recently proposed reforms:
- Tax exemptions for small transactions
- Discussion on separate capital gains treatment
Taiwan lacks detailed rules for:
- Mining rewards
- Airdrops and token incentives
- Crypto-denominated salaries
- Staking and DeFi yields
Without clarity, taxpayers face uncertainty—increasing risks of underreporting or exploitation through informal trading.
Important Risk Notice
Under Taiwan’s Tax Collection Act, the statute of limitations for audits is:
- 5 years for properly filed returns
- 7 years for unreported income
This means past transactions could be reviewed years later. If you’ve made significant gains or plan to cash out, consider proactive reporting.
“The real risk isn’t taxation—it’s unclear taxation,” says Huang. “Uncertainty drives activity underground.”
Frequently Asked Questions (FAQ)
Q1: Do I need to report crypto holdings if I haven’t sold them?
No. Holding crypto without disposal doesn’t require reporting. Taxes apply only when you realize gains.
Q2: How should I track my crypto costs for tax purposes?
Keep detailed records: purchase dates, amounts, prices, fees, and wallet addresses. Use spreadsheets or crypto tax tools to calculate gains.
Q3: Are NFT transactions taxed the same way?
Yes. NFTs are generally treated as virtual commodities. Buying/selling NFTs triggers property transaction tax rules.
Q4: Can I deduct trading losses from my income?
Yes. Capital losses from crypto sales can offset other property transaction gains in the same year. Unused losses may be carried forward.
Q5: What happens if I don’t report crypto income?
You risk penalties, interest, and extended audits (up to 7 years). Voluntary disclosure before audit reduces liability.
Q6: Is gifting crypto taxable?
Gifting to relatives within limits isn’t taxed. Large transfers may trigger gift tax. Recipients don’t pay income tax unless they later sell at a profit.
Final Thoughts
While Taiwan hasn’t enacted comprehensive crypto tax legislation, existing laws already apply to digital asset transactions. Whether you're an investor, miner, or business, understanding these rules helps avoid surprises.
As global standards evolve—from OECD guidelines to Japan’s progressive reforms—Taiwan has an opportunity to build a clearer, fairer framework.
👉 Stay ahead of crypto tax season with smart strategies used by experienced traders.
Until then, documentation, transparency, and professional advice remain your best defense against risk.