Tax on cryptocurrency Malaysia Part 2

Tax on cryptocurrency Malaysia Part 2

IRB has issued the Guideline on Tax Treatment of Digital Currency Transactions dated 26 August 2022.

Key issues in the guideline include :

Taxability

Crypto transactions fall under the scope of Malaysia income tax if

  • the key activities and operation business operations are performed in Malaysia or

  • where there is a business presence in Malaysia

Summary of Tax on Digital Currency

  • Trading of digital currencies - Profit from the business of trading is taxable .

  • Mining of digital currencies - Profits from the mining of digital currencies are subject to income tax if the mining activity is carried out with a profit-seeking motive.

  • Business transactions carried out using digital currency - Record based on the open market value of the underlying goods or services in RM.

  • Realisation of digital currencies from business transaction - The tax treatment of the subsequent disposal of the digital currency received will depend on the analysis of the capital and revenue (ie badge of trade)

  • Realisation of digital currencies investment - The tax treatment will depend on the analysis of the capital and revenue (ie badge of trade).

  • Free distribution - The mere purchase of digital currencies as a result of free distribution/spitting is not taxable.

  • Exchange of digital currencies - The tax treatment will depend on the analysis of the capital and revenue (ie badge of trade)

Past Blog on tax on cryptocurrency Malaysia

https://www.ktp.com.my/blog/tax-on-cryptocurrency-malaysia/05sept2022

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