The Ministry of Finance has pledged to review regulations on taxing cryptocurrency gains amid surges in the digital asset’s prices following the presidential election victory of Donald Trump, a crypto supporter, on Nov. 5.
Minister of Finance Chuang Tsui-yun (莊翠雲) made the promise at a meeting of the legislature’s Finance Committee yesterday after officials admitted to Chinese Nationalist Party (KMT) lawmaker Lai Shyh-bao (賴士葆) that the agency has yet to effectively collect taxes from individuals profiting from cryptocurrency trades.
Lai said cryptocurrency is classified as a digital asset, and such assets, as defined in the Income Tax Act (所得稅法), should not be exempt from income taxes.
Photo: Fang Pin-chao, Taipei Times
Wu Lien-ying (吳蓮英), director-general of the National Taxation Bureau of Taipei, defended her bureau’s existing policy, saying it collects business and corporate income taxes from the 26 cryptocurrency exchanges that have acquired anti-money laundering registration from the Financial Supervisory Commission.
However, she struggled to provide clear details of how income taxes are being collected from investors trading on these platforms.
Taxation Administration Director-General Sung Hsiu-ling (宋秀玲) agreed with Lai that cryptocurrency gains are categorized as digital assets, and investors are required to file income taxes accordingly.
But Lai responded: “Who will file taxes if there’s no auditing?”
Eventually, at Lai’s request, Chuang and Sung vowed to review related rules within three months to better enable the government to tax cryptocurrency gains.
Wu and Sung also mentioned that the Financial Supervisory Commission was drafting a new law related to taxing cryptocurrency, but did not offer any details.
The issue was raised in light of the crypto market’s activity following Trump’s victory.
Trump has voiced support for virtual currencies and introduced a new cryptocurrency project with his three sons in late September called World Liberty Financial.
Bitcoin, the oldest and largest cryptocurrency, has surged nearly 33 percent as of yesterday since Nov. 5 to US$90,723, while dogecoin, a cryptocurrency backed by Trump supporter and Tesla Inc founder Elon Musk, has more than doubled over the same period.
A crypto-friendly climate is expected under Trump’s second presidency.
Under current Taiwanese law, individual income tax follows the principle of territoriality, meaning that income tax is only levied on income generated within Taiwan.
If an individual earns income from non-regular trading of virtual assets within Taiwan, it is categorized as “income from property transactions” under Article 14 of the Income Tax Act, with property referring to different asset classes.
The taxable income is calculated by subtracting the original acquisition cost and related expenses from the transaction price. This amount is then added to the individual’s total income and subject to taxation.
This territoriality principle, however, poses challenges for enforcing strict tax laws on cryptocurrency transactions, a legal professional familiar with cryptocurrency told CNA, speaking on condition of anonymity.
“As far as I know, the finance ministry can only monitor the currency flow of bank accounts used for transactions, similar to how it monitors stock trades,” the source said.
“Taxes can easily be evaded by disguising the transactions as overseas activity conducted in US dollars.”
The expert also noted that for individuals trading virtual currencies on overseas exchanges, even large earnings can evade scrutiny as long as the recorded gains remain below the threshold for taxable overseas income.
For this year, the threshold is NT$7.5 million (US$230,372), an increase from NT$6.7 million last year.
“At this point, I can’t imagine how they’re going to amend these regulations,” the source said.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
JOINT EFFORTS: MediaTek would partner with Denso to develop custom chips to support the car-part specialist company’s driver-assist systems in an expanding market MediaTek Inc (聯發科), the world’s largest mobile phone chip designer, yesterday said it is working closely with Japan’s Denso Corp to build a custom automotive system-on-chip (SoC) solution tailored for advanced driver-assistance systems and cockpit systems, adding another customer to its new application-specific IC (ASIC) business. This effort merges Denso’s automotive-grade safety expertise and deep vehicle integration with MediaTek’s technologies cultivated through the development of Media- Tek’s Dimensity AX, leveraging efficient, high-performance SoCs and artificial intelligence (AI) capabilities to offer a scalable, production-ready platform for next-generation driver assistance, the company said in a statement yesterday. “Through this collaboration, we are bringing two
Even as the US is embarked on a bitter rivalry with China over the deployment of artificial intelligence (AI), Chinese technology is quietly making inroads into the US market. Despite considerable geopolitical tensions, Chinese open-source AI models are winning over a growing number of programmers and companies in the US. These are different from the closed generative AI models that have become household names — ChatGPT-maker OpenAI or Google’s Gemini — whose inner workings are fiercely protected. In contrast, “open” models offered by many Chinese rivals, from Alibaba (阿里巴巴) to DeepSeek (深度求索), allow programmers to customize parts of the software to suit their
RSS