Malaysian Authorities Declare War Against Crypto Tax Evaders
IRB Chief Abu Tariq Jamaluddin issued a stern warning to all Crypto traders & ordered them to declare taxes or face penalties.
Malaysia has taken a proactive stance on regulating the cryptocurrency sector. The Bank Negara Malaysia (BNM), the country’s central bank, and the Securities Commission Malaysia (SC) have established a set of guidelines to ensure transparency and protect crypto investors.
Recently local media outlet The Malaysian Reserve reported that Police and CyberSecurity Malaysia raided Crypto companies in Klang Valley.
In this major operation, 38 personnel from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) raided 10 locations in Klang Valley. The raid targeted crypto companies that failed to report their digital assets trading activities properly to federal authorities.
This initiative is part of the Malaysian government’s efforts to reduce tax revenue loss and improve the country’s tax administration.
The Malaysian authorities alleged that several companies were formed for crypto trading and avoided declaring taxes. The IRB reported finding cryptocurrency trading data in mobile devices and computers during the raids, revealing significant tax revenue loss.
Crypto regulation & taxation
In the jurisdiction of this country, Crypto assets are recognized as securities, and Crypto exchanges must register with the SC. The majority of the rules under the regulatory framework focus on preventing money laundering and ensuring market integrity while encouraging innovation within a controlled environment. The balanced regulatory approach for the crypto sector aims to foster a secure and vibrant crypto ecosystem in Malaysia.
It is worth it to note that Malaysia’s current crypto tax system primarily treats cryptocurrency transactions under existing income tax laws, focusing on the nature and frequency of transactions.
In short, active trading, mining, and business operations involving cryptocurrencies are subject to income tax.
On the other hand, occasional buying, selling, gifting, and holding of cryptocurrencies are not taxed, including receiving crypto through airdrops and forks if not part of trading.
Bitcoin or crypto miners are also required to pay tax for the earnings, with deductible expenses allowed. Also, long-term crypto holdings are not subject to capital gains tax.
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