The stance of Taiwan of China on cryptocurrency is characterized by both openness and prudence. In recent years, the use and trading of crypto assets in Taiwan have gradually increased, with financial institutions and related enterprises becoming more actively involved. Recognizing the high speculative nature of crypto assets and their potential risks in money laundering and terrorist financing, Taiwan has been implementing gradual improvements in its regulatory framework. The Financial Supervisory Commission (FSC) has issued relevant policies to standardize the management of Virtual Asset Service Providers (VASPs) based on market dynamics. In terms of taxation, the Taiwanese government is gradually clarifying its crypto tax policies, aiming to strike a balance between avoiding excessive market intervention and ensuring a fair and transparent tax environment.
Taiwan has 19 types of taxes, which can be categorized into national taxes and local taxes (municipal and county-level taxes) based on revenue allocation. According to Taiwan's current tax regulations, all national taxes, except for customs duties collected by the Ministry of Finance's Customs Administration, are levied by the National Tax Bureau. Local taxes are collected by the tax authorities of municipalities or county (city) governments. This article provides a brief overview of the main taxes related to crypto assets, including income tax, business tax, and securities transaction tax.
The Income Tax Act is the fundamental law governing Taiwan's income tax system. It divides income tax into two categories: comprehensive income tax (for individuals) and profit-seeking enterprise income tax (for enterprises).
Taiwan's comprehensive income tax is comparable to mainland China’s personal income tax. It is imposed on an individual's total income over a certain period (typically one year), including salary, interest, dividends, rental income, and capital gains from asset transactions. The taxable base is the taxpayer's total annual net income, calculated by deducting exemptions, deductions, and special deductions from gross income. Tax residents are required to file their comprehensive income tax return between May 1 and May 31 of the following year, and they must include the income, exemptions, and deductions of their spouse and dependents in their filing.
Taiwan's comprehensive income tax follows a progressive tax rate structure with five brackets: 5%, 12%, 20%, 30%, and 40%. Furthermore, exemptions, standard deductions, special salary deductions, special disability deductions, tax brackets, and retirement income exemptions are adjusted based on the Consumer Price Index (CPI). For 2025, the personal exemption amount is set at NT$97,000.
Taiwan's profit-seeking enterprise income tax is similar to corporate income tax in mainland China. It is levied on the net profit of a business within a fiscal year. However, unlike some jurisdictions where corporate tax applies only to companies, Taiwan's tax system also includes sole proprietorships, partnerships, and cooperatives as taxable entities. Under the Income Tax Act, any profit-seeking enterprise operating in Taiwan—whether state-owned, private, or joint ventures—must pay this tax. This includes businesses engaged in industry, commerce, agriculture, forestry, fisheries, livestock, mining, and metallurgy that have a registered business name or operating premises.
The tax rate structure for profit-seeking enterprises is as follows:
● Annual taxable income below NT$120,000: Exempt from tax● Annual taxable income between NT$120,000 and NT$200,000: Tax rate of 50% on the portion exceeding NT$120,000● Annual taxable income above NT$200,000: Tax rate of 20%
The Value-Added and Non-Value-Added Business Tax Act (hereinafter referred to as the Business Tax Act) governs Taiwan's business tax system, which includes value-added tax (VAT) and non-value-added tax. The tax is levied on the sale of goods, services, and imported goods.
Taiwan's value-added tax (VAT) is imposed on the value added during the sale of goods or services, with the tax base being the difference between input and output values. The current VAT rate is 5%. Starting in 2025, the VAT threshold will be set at NT$50,000 for services and NT$100,000 for goods. Additionally, the Business Tax Act specifies zero-rated items, tax-exempt items, and refund policies for foreign businesses, as well as rules for overpaid tax refunds. Business operators must file their VAT returns every two months and submit their sales revenue and tax obligations to the tax authority within 15 days after the period ends.
Taiwan's non-value-added tax, also known as gross business tax, is levied on the total sales amount, rather than the value-added portion. Under the Business Tax Act, industries subject to non-value-added tax include:
● Financial services● Special catering services● Small-scale businesses● Certain exempted enterprises
These businesses must file tax returns every two months, and if they have a tax liability, they must first pay the tax to the public treasury before submitting their return. However, small-scale businesses and exempted enterprises have their tax amount determined by the tax authority every three months, and they receive a tax bill for payment accordingly.
The Securities Transaction Tax Ordinance is the main law governing Taiwan's securities transaction tax. This tax is levied on the seller based on the transaction price of securities. The tax applies to various securities, including:
● Government bonds● Corporate stocks● Corporate bondsOther securities approved for public sale by the government
The tax rates are as follows:
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In Taiwan, the terms "cryptocurrency" and "virtual asset" are used interchangeably. This article will uniformly refer to them as "crypto assets" while maintaining the original terminology used in relevant regulations. Taiwan's legal classification of crypto assets falls into two main categories:
which are not mutually exclusive.
The classification of certain crypto assets as securities is based on a directive issued by the Financial Supervisory Commission (FSC) in 2019. According to this directive, crypto assets with securities-like characteristics are deemed securities if they meet the following criteria:
Additionally, crypto assets are defined as values stored, exchanged, or transferred digitally using cryptographic and distributed ledger technology or similar methods.
On the other hand, the FSC’s 2024 press release, titled "The FSC Urges the Public to Carefully Evaluate the Risks of Virtual Asset Trading", defines crypto assets as highly speculative digital virtual commodities that are:
These two classifications suggest a dual-nature framework:
Both individuals and enterprises are required to pay income tax on cryptocurrency transactions, and losses from such transactions can be deducted from taxable income.
For ordinary businesses, cryptocurrency transactions are treated as revenue and must be reported annually following standard financial accounting principles. The taxable income is then determined based on Taiwan's general income tax regulations.
For crypto asset trading platforms, taxable income is calculated based on their service revenue, which includes transaction fees and commission income, similar to how traditional service industries are taxed.
For individual investors, crypto trading profits are categorized under capital gains and must be included in the individual's property transaction income when filing taxes.
In practice, due to the lack of a centralized trading market for crypto assets, tax authorities can only access fund flow data (i.e., the amount deposited and withdrawn) without detailed transaction records. Unlike the stock market, where every buy and sell transaction is recorded, the absence of such records in crypto trading makes it difficult for tax authorities to calculate taxable gains.
Consequently, taxable income is determined only when funds are withdrawn from a trading platform into an investor's personal account. The initial capital invested is recognized as the cost basis, and taxable profit is calculated based on the difference between deposits and withdrawals.
This method has certain limitations:
This lack of clarity creates uncertainty for both investors and tax authorities.
Frequent cryptocurrency transactions may also be subject to business tax. The Taipei National Tax Bureau has stated in an online forum, that according to a directive issued by the Ministry of Finance on January 31, 2020:
"If individuals trade virtual currencies online, the nature of these assets should be determined on a case-by-case basis. If they qualify as general digital goods (services), and their monthly sales revenue meets the taxable threshold (NT$100,000 for goods and NT$50,000 for services), business registration and tax payment are required. However, if virtual currencies function as payment tools, they are not subject to business tax."
In practical terms:
Crypto assets that have securities-like properties are subject to securities transaction tax. Taiwan has well-established regulations governing Security Token Offerings (STOs), requiring issuers to comply with:
According to a 2020 directive from the Ministry of Finance:
Taiwan has yet to establish a comprehensive legal framework for cryptocurrency regulation, but significant progress is being made through the formulation of new regulations.
From an anti-money laundering (AML) perspective, Taiwan's cryptocurrency regulatory system is primarily based on the "Regulations on Anti-Money Laundering and Counter-Terrorism Financing for Virtual Currency Platforms and Trading Businesses" (hereinafter referred to as the AML Act). Under this regulation, the Executive Yuan has designated the Financial Supervisory Commission (FSC) as the primary AML regulatory authority for the crypto industry.
The AML Act aligns with Financial Action Task Force (FATF) international standards, emphasizing the prevention of money laundering and terrorist financing. Compliance requirements include:
Crypto trading platforms and businesses must adhere to these regulations to legally operate in Taiwan. Individuals or enterprises providing crypto asset services without AML registration with the FSC will face severe penalties.
Regulatory Shift from Self-Regulation to Government Oversight
Regarding crypto asset security (such as preventing theft or loss), Taiwan is transitioning from industry self-regulation to direct government oversight.
To gradually strengthen oversight of crypto asset platforms, the FSC introduced the in September 2023, as a compliance reference for industry participants.
Key Regulations Under the Guiding Principles
The Guiding Principles build upon the AML Act and regulate the business operations of VASP providers in two key areas:
These regulations shift the regulatory focus from self-regulation to direct governmental oversight, aiming to enhance fund security and investor protection.
Taiwan's tax and regulatory policies on crypto assets are gradually becoming more structured and transparent. Currently, Taiwan classifies crypto assets as both virtual commodities and securities while establishing a flexible tax framework.
At the same time, the FSC, through the AML Act and the Guiding Principles for VASPs, has reinforced its oversight of crypto platforms in areas such as:
Future Developments in Taiwan's Crypto Regulations
Looking ahead, Taiwan's crypto asset regulation is expected to become more legally structured and institutionalized.
Taiwan’s Evolving Crypto Policy Approach
Taiwan's crypto asset policies are evolving towards a more systematic and internationally aligned approach.
These developments will:
Taiwan's Position in the Asian Crypto Market
With:
Taiwan is poised to become a more influential player in the Asian crypto asset market.
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