Taiwan Aims to Amend Cryptocurrency Tax Regulations in Response to Market Expansion and Evasion Issues

Byadmin

Nov 20, 2024
Taiwan Aims to Amend Cryptocurrency Tax Regulations in Response to Market Expansion and Evasion IssuesTaiwan Aims to Amend Cryptocurrency Tax Regulations in Response to Market Expansion and Evasion Issues

As Taiwan’s cryptocurrency market experiences significant growth, financial regulators are under pressure to revisit the country’s tax laws, which currently struggle to capture digital asset profits.

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With increasing concerns over tax evasion in the crypto space, local authorities are exploring ways to strengthen enforcement.
During a recent hearing, Taiwan’s Ministry of Financeacknowledgedthat the country lacks a clear system for taxing cryptocurrency earnings. Finance Minister Chuang Tsui-yun admitted that effective tracking of individual crypto transactions has not been implemented.
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Lawmaker Lai Shyh-bao raised questions about the fairness of the current tax approach, noting that crypto traders might avoid paying taxes due to the absence of stringent audits. Lai argued that, despite cryptocurrencies being classified as digital assets, there’s no clear directive to ensure investors report their gains.
Tax officials, including Sung Hsiu-ling from the Taxation Administration, emphasized that individuals are still obligated to report income from crypto. However, the system’s implementation remains unclear, with enforcement proving difficult. Wu Lien-ying, head of the National Taxation Bureau of Taipei, mentioned that only crypto exchanges with anti-money laundering licenses are taxed, but there’s still uncertainty around how taxes are enforced for traders on these platforms.
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Meanwhile, Taiwan’s Financial Supervisory Commission (FSC) is in the process of drafting new regulations to address digital asset taxation. Despite updates to crypto exchange rules, these efforts face hurdles. Taiwan’s current tax laws are based on a territorial principle, taxing only income earned within the country’s borders. This creates challenges for crypto traders who use international platforms, as their earnings may escape tax scrutiny if they fall below the $230,000 threshold for foreign income in 2024.

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Experts warn that unless these laws are overhauled, the country’s crypto tax collection system will continue to face difficulties in tracking and taxing the growing number of digital asset transactions.

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