Introduction
Taiwan has adopted a balanced approach toward crypto assets, blending openness with prudent oversight. As cryptocurrency adoption grows across the island, financial institutions and businesses are increasingly engaging with digital assets. This guide explores Taiwan's evolving tax policies and regulatory measures for crypto assets, offering insights for investors and industry stakeholders.
Taiwan's Tax System Overview
2.1 Income Tax
Taiwan imposes two types of income taxes:
Individual Income Tax: Progressive rates (5%–40%) apply to annual net income, including crypto trading gains.
- 2025 tax-free threshold: NT$97,000.
- Corporate Income Tax: Flat 20% rate for profits exceeding NT$200,000, with partial taxation for lower tiers.
2.2 Value-Added Tax (VAT)
- Standard Rate: 5% for goods/services, including qualifying crypto transactions.
- Thresholds: NT$50,000 (services) or NT$100,000 (goods) monthly sales trigger VAT registration.
2.3 Securities Transaction Tax
- Stocks: 0.3% on trade value.
- Bonds/STOs: 0.1% for approved security-like tokens.
Crypto-Specific Policies
3.1 Legal Classification
Taiwan defines crypto assets as:
- Securities: If meeting capital-raising criteria (e.g., STOs).
- Virtual Commodities: For general-purpose tokens.
👉 Explore Taiwan's crypto regulations
3.2 Tax Treatment
| Tax Type | Applicability | Rate/Notes |
|---|---|---|
| Income Tax | All realized gains | Individual: Progressive rates Corporate: 20% |
| VAT | Trading as goods/service | 5% (above thresholds) |
| Securities Tax | STO transactions | 0.1% |
Key Challenge: Cost-basis calculation lacks official methodology for partial disposals.
3.3 Regulatory Framework
- Anti-Money Laundering (AML): Mandatory KYC for exchanges under the Money Laundering Control Act.
Investor Protection: 2023 VASP Guidelines require:
- Client fund segregation
- Stablecoin issuance bans
- Transparent listing/delisting procedures
Future Outlook (2025 Onward)
- Dedicated VASP Legislation: Expected draft by mid-2025.
- Custody Services: Pilot program approvals begin January 2025.
- Tax Clarifications: Potential guidance on cost-accounting methods.
FAQs
Q1: How are crypto-to-crypto trades taxed?
A: Currently taxed upon fiat conversion; pure crypto swaps lack clear rules.
Q2: Must foreign platforms comply with Taiwan's VAT?
A: Only if serving local customers with taxable supplies exceeding thresholds.
Q3: What records should investors maintain?
A: Full transaction history (dates, amounts, counterparties) for 5-7 years.
👉 Stay updated on Taiwan's crypto policies
This guide reflects policies as of 2025. Always consult a tax professional for specific cases.