As the May tax filing season draws to a close, discussions around cryptocurrency taxation have resurfaced. With increasing adoption of digital assets in Taiwan, many investors are asking: Do I need to report my crypto gains? How are domestic and overseas earnings treated differently? Can I claim losses from crypto trades? This article breaks down the current tax regulations in Taiwan, offering clarity for individual investors navigating this evolving landscape.
👉 Discover how to accurately report your crypto gains and avoid unexpected tax penalties.
Understanding Cryptocurrency Taxation in Taiwan
The Central Bank and Financial Supervisory Commission (FSC) classify cryptocurrencies as virtual commodities—highly speculative digital assets rather than legal tender. As such, profits from trading or selling crypto are considered property transaction income, subject to income tax under Article 14, Paragraph 1, Category 7 of Taiwan’s Income Tax Act.
This means:
Taxable Gain = Sale Proceeds – Acquisition Cost
However, it's crucial to understand that tax liability arises only when funds are withdrawn (cashed out) into a Taiwanese bank account. Simply transferring or trading crypto on exchanges or blockchain networks does not trigger a taxable event.
Key factors influencing tax obligations include:
- Whether the transaction occurs on a domestic or overseas exchange
- The amount of income generated
- The investor’s total household income
Core Keywords:
- Cryptocurrency tax
- Virtual currency taxation
- Crypto profit reporting
- Digital asset tax rules
- Capital gains from crypto
- Tax loss harvesting crypto
- Crypto tax thresholds
- Filing crypto taxes
Tax Treatment: Domestic vs. Overseas Crypto Income
Domestic Crypto Income
When you withdraw funds from a Taiwan-based exchange, the income is classified as domestic. The taxable amount is calculated as:
(Withdrawn Amount – Initial Purchase Cost) + Other Gains
This net gain is added to your comprehensive income total and taxed under personal income tax brackets.
Investors can use the Ministry of Finance’s official e-tax calculator to estimate their liability.
Important Threshold: NT$500,000
Under the Anti-Money Laundering Act, banks must report any single transaction exceeding NT$500,000 to the tax authorities. While this doesn’t automatically mean taxes are due, it increases scrutiny—especially if patterns suggest unreported income.
👉 Learn how to structure your withdrawals to stay compliant with local regulations.
Overseas Crypto Income
Income from foreign exchanges (e.g., Binance, OKX, Kraken) is treated as overseas-sourced income. Reporting is required only if all three of the following conditions are met:
- Total household overseas income ≥ NT$1 million
- Household basic taxable income (comprehensive income + overseas income + specific additions) > NT$6.7 million
- Basic tax liability [(Basic Income – NT$6.7M) × 20%] > regular income tax owed
Simplified Breakdown:
| Scenario | Reporting Required? | Tax Payment Needed? |
|---|---|---|
| Overseas income < NT$1M | No | No |
| ≥ NT$1M but basic income < NT$6.7M | Recommended | No |
| ≥ NT$6.7M basic income | Yes | Possibly |
Note: A "filing household" includes spouses and dependents who file jointly.
Can Crypto Losses Be Used to Offset Taxes?
Yes—but with important distinctions between domestic and overseas transactions.
Domestic Crypto Losses
Losses from local trades can be claimed under the property transaction loss deduction:
- Must be supported by verifiable records (trade history, withdrawal proofs)
- Deduction capped at annual property transaction gains
- Unused losses can be carried forward for up to three years
Example: If you have NT$100,000 in losses and NT$70,000 in gains in one year, you can deduct NT$70,000 now and carry forward the remaining NT$30,000.
Overseas Crypto Losses
Claiming foreign losses is more complex:
- Requires official transaction data from overseas platforms
- Only applicable if overseas income exceeds NT$1 million and basic income surpasses NT$6.7 million
- In practice, tax authorities may struggle to verify foreign exchange data, making enforcement difficult
Despite theoretical eligibility, many investors face challenges proving cost basis or transaction timing—especially with decentralized wallets or peer-to-peer trades.
Expert Insights: What Legal Professionals Say
蔡昆洲 (Tsai Kun-Chou), Founding Partner at Shang-Cheng Law Firm
“There is no exemption for crypto investors in Taiwan’s tax system. Even without explicit laws, profits are still taxable. For high-volume traders or large withdrawals, proactive reporting—ideally with help from accountants or lawyers—is strongly advised.”
He emphasizes that both the source of profit (domestic vs. foreign) and holder type (individual vs. company) affect tax treatment.
熊全迪 (Hsiung Chuan-Ti), Partner at Lee and Li Attorneys-at-Law
“Proving cost basis is one of the biggest hurdles. Without clear records showing where, when, and at what price you bought crypto, the tax bureau might estimate your cost—say, 70% of sale price—and tax the remaining 30%.”
This estimation method protects the government’s revenue but could lead to overtaxation for those who actually paid higher prices.
Frequently Asked Questions (FAQ)
Q: Do I need to report crypto if I never cash out?
A: No. As long as funds remain on an exchange or wallet, no taxable event occurs. Only withdrawals into a bank account trigger reporting requirements.
Q: What counts as proof of cost basis?
A: Exchange trade histories, deposit records, purchase receipts, and blockchain transaction IDs. Maintain detailed logs across all platforms used.
Q: Are staking rewards or airdrops taxable?
A: While not explicitly clarified, these are likely treated as income upon realization (i.e., when sold or converted), similar to mining rewards.
Q: Can I avoid taxes by using a foreign exchange?
A: Not necessarily. If you're a Taiwan tax resident, overseas income above NT$1 million and NT$6.7 million thresholds must still be reported.
Q: What happens if I don’t report eligible income?
A: Penalties may apply, including back taxes, interest, and fines. Voluntary disclosure before audit reduces liability.
Q: Is there a deadline for claiming carried-forward losses?
A: Yes—unutilized property losses must be used within three consecutive years; otherwise, they expire.
👉 Stay ahead of tax season with tools that track your cost basis automatically.
Final Thoughts: Stay Informed, Stay Compliant
While Taiwan lacks comprehensive crypto-specific tax legislation, existing frameworks clearly apply to digital asset gains. Key thresholds—NT$500,000 for domestic reporting triggers** and **NT$1 million / NT$6.7 million for overseas income—serve as critical benchmarks.
Given the complexity of cross-border transactions and evolving regulatory oversight, investors should:
- Keep meticulous records of all trades
- Consult tax professionals for large or frequent transactions
- Proactively report gains to avoid penalties
As global scrutiny on crypto taxation grows, early compliance not only ensures peace of mind but also supports the long-term legitimacy of digital asset investing in Taiwan.