Taiwan’s Regulation for Security Token Offering (STO) has become effective in October 2019, and the taxation of cryptocurrency has once again become the subject of discussion.
The Ministry of Finance (MOF) has indicated that utility tokens such as Bitcoin and Ether will not be subject to the business tax, while the income from transactions using cryptocurrency will be taxed. In other words, the National Taxation Bureau (NTB) will collect income taxes based on the data on currency trading platforms, but business taxes will not be imposed.
The MOF states that most countries regard cryptocurrencies as “mediums of exchange” rather than “financial instruments”, and thus Bitcoin transactions are the same as U.S. dollar transactions, and the income from Bitcoin transactions is deemed as income from property transactions, and will be taxed. Miners who acquire cryptocurrency through mining will be treated the same, that is filing income reports from cryptocurrency transactions and paying tax on the same, accordingly.
The MOF has been collecting business taxes and income taxes from currency trading platforms. If said currency trading platforms proffer any website or platform for Bitcoin, Ether, or any other type of cryptocurrency, any service fee or administration fee derived from these transactions will be subject to a 5% business tax, and the net income of the platform will be subject to a 20% Profit Seeking Enterprise Income Tax.