The Inland Revenue Board (IRB) has identified several individuals and companies engaged in cryptocurrency trading in an effort to reduce tax revenue leakage and improve the country’s tax administration.
LHDN Chief Executive Officer Datuk Dr. Abu Tariq Jamaluddin said that the frequency of cryptocurrency trading transactions is high and that LHDN is currently reviewing data to determine whether there are any taxation issues.
“We know that in certain situations, if the number of transactions is high and so on, any profit from cryptocurrency is also subject to tax.
“They are conducting these activities with a high frequency and are not making any reports to us,” he told reporters at the Corporate Tax Governance (TCG) Program here today.
It was recently reported that LHDN’s special compliance operation, Ops Token, was conducted to reduce tax revenue leakage in cryptocurrency trading. The operation was carried out in collaboration with the Royal Malaysia Police and Cybersecurity Malaysia (CSM) at 10 different locations around the Klang Valley simultaneously.
Abu Tariq added that any individual involved in cryptocurrency trading in the country is subject to income tax in Malaysia, and those who are unsure about the taxation system can contact LHDN or refer to the established guidelines.
Information regarding the Guidelines on Tax Treatment of Digital Currency Transactions can be downloaded via quick access at: https://phthasil.gov.my/pdf/pdtam/GP_LAYANAN_CUKAI_KE_ATAS_TRANSAKSI_MATA_WANG_DIGITAL.pdf.
Earlier in his speech, he said that the TCG program provides a broader understanding of taxpayer organisation management, tax governance procedures, and tax risk control. It also aims to improve the relationship between taxpayers and LHDN to enable taxation issues to be resolved through consultation rather than confrontation.
LHDN launched TCG on March 1, 2022, as an initiative to empower voluntary compliance activities with a focus on strong cooperation between taxpayers and LHDN as the national tax administrator.
The program’s launch involves two main phases: a pilot project that began on June 1, 2022, and will continue until June 30, 2024, followed by the full implementation of TCG starting July 1.
