FAQs: LHDN and Crypto tax

When is crypto taxable?

1. How much in percentage tax deduction is applied to an individual? For example, if they withdraw RM 10,000 from their Luno account and transfer it to their own bank account.

If the amount of RM10,000 is revenue in nature, the amount is subject to income tax under the Income Tax Act 1967 (ACP 1967). The percentage rate of tax deduction is dependent on a person’s taxable income (gross annual income minus individual basic relief and eligible tax rebates) according to Part 1, Table 1 of the ITA 1967.

However, if the amount is considered as capital gain, it is not taxable.

2. Will I be taxed for investing in Luno?

Investing in any digital currencies and tokens at any Digital Asset Exchange platform (including Luno) is subject to income tax if the profit is under the badges of trade at the point of disposal of the digital currency or token.

3. If I bought an amount of coins from a platform which is not recognized by Bank Negara/Security Commission/LHDN and the profit from the sale of the coin is 1,000,000 USDT. Is the amount considered as taxable?

Any gain or profit derived from carrying on a business, trade, vocation or profession are liable to the tax (including any form of business that is not registered/recognised with any local authority).

Gain or profit from active trading digital currencies is subject to tax if the profit of selling digital token 1,000,000 USDT was revenue in nature.

Note: Luno Malaysia does not currently support USDT.

4. Is it taxable if a person trades in stablecoins? For example, selling BTC/ETH to USDT/USDC without taking profit into MYR?

Stablecoins are cryptocurrencies where the price is designed to be pegged to a reference asset. The reference asset may be fiat money, exchange-traded commodities or a cryptocurrency. 

If the profit/appreciation in value is revenue in nature, once it is realised, it is taxable.

Note: Luno Malaysia does not currently support stablecoins such as USDT or USDC.

5. If I stake my USDC/USDT for a long period, and I get paid in USDC/USDT, will I be taxed if I convert my staked profit into MYR? 

Staking is “locking up” a portion of your Crypto for a period of time as a way of contributing to a blockchain network. In return, stakers can earn rewards, typically in the form of additional coins or tokens. The taxability from the staking activity will depend on the facts of the case and the badges of trade. It will be taxable if there is a profit-seeking activity. Therefore, the profit needs to be converted to MYR for declaration purposes.

Note: Luno Malaysia does not currently support stablecoins such as USDT or USDC.

6. Do I declare a tax if I bought BTC that was initially gaining profit, but after time reduced in value to make a loss? 

Any individual that actively trades digital currency is seen as generating revenue from the activity, thus, gains from the trades are taxable under Section 4 (a), ITA 1967.

However, any losses derived from the digital currency trading activity will be considered tax-deductible as long as the claimed expenses and losses fulfilled the requirement under Sections 33 and 38, ITA 1967.

7. Are cryptocurrencies given by other individuals taxable?

Taxability on cryptocurrencies given by other individuals is based on the facts of the situation, the use case, and the badges of trade.

If a person receives free digital currencies as a promotional or marketing tool, or through an airdrop or a hard fork, it is not subjected to tax.

However, the said transaction above might be subject to income tax if the digital currencies were given as an exchange for specific goods or services.

Profits derived from the disposal of the said digital currencies in the future will be taxable if the profit is revenue in nature.

8. If I am using a trading platform with a trading leverage function and suffered a loss, am I still able to claim the loss in my income tax? Is there any limit for the claim and am I still able to claim it if the transaction happened two or three years ago?

Any losses incurred from digital currency trading activities can be allowed as tax deductions as long as the expenses or losses claimed meet the requirements under Sections 33 and 39 of the ITA 1967.

If the business loss cannot be absorbed for a certain assessment year, the adjusted loss of the business can also be carried forward to the next year and the following year under Sections 44(2), 43(2), 44(4) and 44(5) of the ITA 1967.

Regarding the time limit for non-absorbable business adjustment losses to be carried forward, please refer to General Ruling No. 1/2022

9. My friends earn interest by keeping the digital crypto in a certain wallet. Is the interest subject to income tax?

Income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax-exempt:

  1. A bank or a finance company licensed or deemed to be licensed under the Financial Services Act 2013;
  2. A bank licensed under the Islamic Financial Services Act 2013;
  3. A development financial institution prescribed under the Development Financial Institutions Act 2002;
  4. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;
  5. The Malaysia Building Society Berhad incorporated under the Companies Act 2016;
  6. The Borneo Housing Finance Berhad incorporated under the Companies Act 2016; and
  7. Co-operative societies registered under the Co-operative Societies Act 1993

In the opinion of the IRBM (LHDN), interest income received from other than the above institutions is taxable.

10. Generally, it seems like IRBM (LHDN) needs to evaluate each case whether it’s taxable or not. So how or when can we get such an evaluation done? Do we get a consultation before we submit our yearly individual tax assessment? Or do we declare and pay upfront and then claim a refund later?

The self-assessment system (STS) has started for individuals starting from the year of assessment 2004.

Under STS, the taxpayer is required by the law to determine his taxable income, compute chargeable income tax, submit the income tax return form and make tax payments for the year of assessment concerned.

You can visit any IRBM nearest branch or any tax agent registered under S.153, ITA 1967 for clarification before submitting your Return Form. 

11. What if I get an airdrop and then exchange it for XRP and then sell my XRP and cash out to MYR? How do I calculate the tax or justify the sales from airdrop?

Taxability on digital currencies is based on the facts of the situation, the use case, and the badges of trade.

If a person receives free digital currencies as a promotional or marketing tool, or through an airdrop or a hard fork, it is not subjected to tax.

However, after making the conversion, the profit from the disposal of the digital currency will be taxed if there is a fact that it is traded and produces profit that is revenue in nature.

Thus, it is important to keep a complete record of transactions to determine the status of the transactions.

12. If I sold my cryptocurrency to pay taxes, is the sale profit taxable?

Income tax is not applicable to digital currency sales. On the other hand, income tax will be levied on profits or income received from digital currency transactions.

13. Why is staking rewards subject to tax when something like interest from a fixed deposit is not taxable?

Staking reward is a way of earning an income in digital currency transactions.  It is of the same nature of interest.

Unlike staking reward, an income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax-exempt:

i. A bank or a finance company licensed or deemed to be licensed under the Financial Services Act 2013;

ii. A bank licensed under the Islamic Financial Services Act 2013;

iii. A development financial institution prescribed under the Development Financial Institutions Act 2002;

iv. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;

v. The Malaysia Building Society Berhad incorporated under the Companies Act 2016;

vi. The Borneo Housing Finance Berhad incorporated under the Companies Act 2016; and

vii. Co-operative societies registered under the Co-operative Societies Act 1993

Since digital currency is not a legal tender in Malaysia, there is no interest/reward exemption given for staking activities. Therefore, it is taxable.

14. If I sold my cryptocurrency after keeping it for a year, will I be taxed?

If the facts show that it is a capital gain, it will not be taxed. If it does not, then the revenue gains may be taxable.

How to pay tax on crypto

1. How do I pay tax on my crypto?

Payment for income tax can be done through available methods – cash, credit card, online payment and money transfer in MYR.

Do we need to register as a business to SSM for crypto tax declaration? If yes, which category or business code applies?

All businesses that are established in Malaysia are required to register with the Companies Commission of Malaysia (SSM) and declare their income to the Inland Revenue Board of Malaysia (IRBM). Please refer to SSM’s official website for more details about the business registration procedure including the appropriate Business Code.

Capital gains are not taxed in Malaysia, except profits from real property disposal; houses, commercial buildings, farms, vacant land and profits from stock disposal in real property companies under the Real Property Gain Tax Act 1976 (ACKHT 1976).

2. Some platforms only allowed users to access transaction records in the past 3 months. There might be differences between the real transaction value with the value recorded by the user due to transaction fees. The differences may be bigger if there is a high number of transactions or crypto prices increase significantly. When calculating a tax, how much is the difference between real value and the value recorded by the user himself? 

It is important for taxpayers to keep business records as provided under Section 82 of the ITA 1967, where there is an obligation to keep records and keep relevant receipts. In the said Section, every person who runs a business must keep sufficient records to enable business income or loss or surplus/deficit income to be determined easily and accurately.

Since the value of digital currency is constantly changing, any digital currency transaction must be recorded based on fair value, i.e. at the rate in effect on the day of the transaction and based on an acceptable and verifiable digital currency exchange in Ringgit Malaysia (RM).  

Transaction fees can be considered as a part of the selling and buying cost, thus the payment information of this charge needs to be included in order to justify the differences between the real value and recorded value. The value that will be used in the profit/loss calculation is the real value.

3. If my transaction is made in USD, how do I record my transaction in MYR?

To record digital currency transactions in Ringgit Malaysia (RM), he/she can have it recorded based on the value of the exchange at the time when the transaction was completed.

Generally, it seems like IRBM (LHDN) needs to evaluate each case whether it’s taxable or not. So how or when can we get such an evaluation done? Do we get a consultation before we submit our yearly individual tax assessment? Or do we declare and pay upfront and then claim a refund later?

The self-assessment system (STS) has started for individuals starting from the year of assessment 2004.

Under STS, the taxpayer is required by the law to determine his taxable income, compute chargeable income tax, submit the income tax return form and make tax payments for the year of assessment concerned.

You can visit any IRBM nearest branch or any tax agent registered under S.153, ITA 1967 for clarification before submitting your Return Form. 

4. Why is staking rewards subject to tax when something like interest from a fixed deposit is not taxable?

Staking reward is a way of earning an income in digital currency transactions.  It is of the same nature of interest.

Unlike staking reward, an income in respect of interest received by individuals resident in Malaysia from money deposited with the following institutions is tax-exempt:

i. A bank or a finance company licensed or deemed to be licensed under the Financial Services Act 2013;

ii. A bank licensed under the Islamic Financial Services Act 2013;

iii. A development financial institution prescribed under the Development Financial Institutions Act 2002;

iv. The Lembaga Tabung Haji established under the Tabung Haji Act 1995;

v. The Malaysia Building Society Berhad incorporated under the Companies Act 2016;

vi. The Borneo Housing Finance Berhad incorporated under the Companies Act 2016; and

vii. Co-operative societies registered under the Co-operative Societies Act 1993

Since digital currency is not a legal tender in Malaysia, there is no interest/reward exemption given for staking activities. Therefore, it is taxable.

5. If I sold my cryptocurrency after keeping it for a year, will I be taxed?

If the facts show that it is a capital gain, it will not be taxed. If it does not, then the revenue gains may be taxable.

Crypto tax and capital gains

1. How much in percentage tax deduction is applied to an individual? For example, if they withdraw RM 10,000 from their Luno account and transfer it to their own bank account.

If the amount of RM10,000 is revenue in nature, the amount is subject to income tax under the Income Tax Act 1967 (ACP 1967). The percentage rate of tax deduction is dependent on a person’s taxable income (gross annual income minus individual basic relief and eligible tax rebates) according to Part 1, Table 1 of the ITA 1967.

However, if the amount is considered as capital gain, it is not taxable.

2. Are investments from crypto considered capital gain? What about the capital loss that contributes to tax reduction? 

Businesses that buy digital currencies for long-term investment purposes may enjoy a capital gain from the disposal of these digital currencies. However, as there are no capital gains taxes in Malaysia; such gains are not taxable. 

Any capital loss in relation to that investment would not be allowed as a deduction.

However, the taxability of a profit from the investment would depend on the facts and must be evaluated on a case-to-case basis.

3. Capital gain taxes are not taxable but what is the maximum amount that is not taxable? 

As Malaysia does not tax capital gains, there is no maximum amount which is non-taxable.

4. How do I justify the withdrawal of RM 10,000 as capital gains if the RM 10,000 was digital currency that was transferred to Luno from another wallet and then from Luno it was sold and withdrawn to my bank account?

The taxability of the gain from the disposal of digital currencies is dependent on the facts and circumstances of the said transactions (RM10,000)  and whether or not the disposal is capital or revenue in nature. Any gain/profit from sales or transfer of digital currencies must be considered based on the badges of trade in the Guidelines to determine its taxability.

5. What is an example of capital in nature?

Income which is capital in nature is profit/gain from asset disposal such as cars, buildings, office furnishing, etc.

Expenses which are capital in nature are purchases of assets such as cars, buildings, office furnishing, etc.

6. If I buy Bitcoin at RM 100K today and sell it at RM 200K tomorrow, is that considered capital gain and non-taxable?

IRBM (LHDN) will verify the transaction to identify the nature of the gain. Therefore, it is crucial to keep all documents for verification purposes.

7. How can we determine if a transaction is capital gains and not taxable or revenue gains and taxable?

It is based on the badges of trade and depends on the facts of the case.

8. Is there any minimum period to hold a cryptocurrency before it is considered as an investment which is capital in nature?

There is no specific period and is based on the facts of the case.

I am working and earn under RM 2,000, thus I am not applicable for income tax. However, if I sell my cryptocurrency that I bought and the profit was capital in nature, do I still need to report it to IRBM (LHDN)?

If the facts of the case show that it is truly a capital gain, then no reports are needed.

9. How do I justify the withdrawal of RM 10,000 as capital gains if the RM 10,000 was digital currency that was transferred to Luno from another wallet and then from Luno it was sold and withdrawn to my bank account?

The taxability of the gain from the disposal of digital currencies is dependent on the facts and circumstances of the said transactions (RM10,000)  and whether or not the disposal is capital or revenue in nature. Any gain/profit from sales or transfer of digital currencies must be considered based on the badges of trade in the Guidelines to determine its taxability. 

Crypto tax and revenue

1. Revenue tax is when you buy and sell, or perform trading in the short term. What is the cap for the revenue tax amount per individual?

The calculation of taxable income for individual income tax is after the deduction as per Part 1, Schedule 1, ITA 1967.

2. How do I keep track of how much revenue taxes I should pay and where can I get this figure? 

The self-assessment system (STS) started for companies from the year of assessment 2001, while for other companies from the year of assessment 2004.

Self-assessment means that taxpayers are required by law to determine taxable income including income from digital currency transactions, calculating the taxable income before submitting the respective Return Form as provided under Sections 77 and 77A, ITA 1967. 

In order to keep track of the revenue, it is advisable for all the transactions to have been properly documented and recorded as this is also a requirement under Section 82, ITA 1967

3. How can we determine if a transaction is capital gains and not taxable or revenue gains and taxable?

It is based on the badges of trade and depends on the facts of the case.

Tax and NFTs

1. Will there be a tax on NFT sales profits? For example, if I convert my crypto into NFTs and the NFTs outperform my crypto to make a profit.

A Non-fungible token (NFT) is a unique digital identifier that cannot be copied, substituted, or subdivided, and is recorded in a blockchain. It can be transferred and marketed at any price. So, any gain or profit from sales of an NFT can be taxable. Please take note that the appreciation of NFTs is not taxable until it is realised.

2. Does tax regulation include NFTs? 

The taxability of digital currencies transactions applies to any person that acquires or disposes of digital currencies as well as involve in the business of digital currencies including NFTs

3. If I bought an NFT with a high price but sold at a lower price due to a market drop. Can I claim for loss in my income tax?

Any losses in business derived from digital currency trading activities are allowed to claim a tax deduction, as long as the claimed expenses or losses meet the requirements under Sections 33 and 39 ACP 1967.

Sending crypto to Luno from another exchange

1. How do I declare tax for cryptocurrencies that are bought from other exchanges and then transferred to Luno to be cashed in a local bank? Are there any criteria that need to be fulfilled or any documents that need to be prepared? 

The taxability of digital currency transactions in Malaysia is based on Section 3 of the ITA 1967 where the income of any person accrued within or derived from Malaysia or received in Malaysia from outside Malaysia is taxable.

If a person is actively trading digital currencies and earns profits from the said activity, the profit may be taxable.

A complete document and records under Section 82, ACP 1967 need to be prepared and kept by the taxpayers in order to determine excess income or loss easily and accurately.

The following is the example of documents and records that are needed to be kept for digital currencies transactions:

1. Purchase records of digital currencies from DAX (cost) and method of payment.

2. Transfer records to Luno and the transferred amount.

3. Sales record and proof of fund transfer to a bank account; to validate the amount of disposal.

4. Other documents and records that validate the said transaction.

2. Is it taxable if I trade binary options on an overseas platform and I convert the profit to Bitcoin and transfer it to Luno?

A binary option is a type of derivative option where a trader makes a bet on the price movement of an underlying asset in the near future for a fixed amount.

The taxability of any digital currency transactions in Malaysia is based on Section 3 of the ITA 1967 where the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia is taxable. If the income is derived from outside Malaysia, the remittance for individuals is exempted until 31 Dec 2026 provided it has been taxed at the origin country. Please refer to P.U.(A) 5/2022

3. How do I justify the withdrawal of RM 10,000 as capital gains if the RM 10,000 was digital currency that was transferred to Luno from another wallet and then from Luno it was sold and withdrawn to my bank account?

The taxability of the gain from the disposal of digital currencies is dependent on the facts and circumstances of the said transactions (RM10,000)  and whether or not the disposal is capital or revenue in nature. Any gain/profit from sales or transfer of digital currencies must be considered based on the badges of trade in the Guidelines to determine its taxability. 

4. If I buy crypto from an overseas platform, is it considered foreign income for exemption since we are not using any Malaysian platform?

The taxability of digital currency transactions in Malaysia is based on Section 3 of the ITA 1967 where the income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia is taxable. If the income is derived from outside Malaysia, the remittance for individuals is exempted until 31 Dec 2026 provided it has been taxed at the origin country. Please refer to P.U.(A) 5/2022. 

Which platform is used is not a factor in determining the taxability of the transaction.

Earning in cryptocurrency

1. Is there a minimum amount of profit made on crypto investments and trades that is eligible for tax?

There is no minimum amount for profit in cryptocurrency trading and investment that is considered taxable. Tax income rates on digital currency depending on the taxpayer’s category – business, partnership, limited liability partnership or individual.

2. How long is the duration to differentiate between assets that are considered as trading and as investment, because trading is taxed while investment is apparently not taxed?

The indication of active trading is very much dependent on the facts and circumstances of the said transactions. Any sequence/frequency/duration transactions of digital currencies must be considered based on the badges of trade in the Guidelines to determine its taxability.

3. I am working for an overseas company that runs a business in the US/UK. This company does not have any businesses or customers in Malaysia. I am working remotely and earn my salary in USD/digital currency. Is this subject to tax in Malaysia?

The taxability of digital currency transactions in Malaysia is based on Section 3 of the ITA 1967 where income of any person accruing in or derived from Malaysia or received in Malaysia from outside Malaysia is taxable.

Hence, any occupation that is conducted in Malaysia is taxable in Malaysia, including a salary that is paid in digital money.

4. If I am working for a foreign company and am being paid in crypto, is the income taxable?

If the employment income is derived in Malaysia, it is taxable and you need to convert that crypto amount to MYR on the date of transaction.

Trading and crypto tax

1. There are many examples of cryptocurrency trades from a company or business perspective. What about an individual who trades? Are these trades taxable?

Taxability on digital currency trading is also applicable to individuals.

2. If I buy crypto using the DCA method, is it considered as a “frequent transaction” under the badges of trade and will I be taxed when I sell for profit later on?

Dollar-Cost Averaging (DCA) is a crypto investment method that allows you to get a low buy and sell price. By using the DCA method, most crypto traders will invest a certain amount of money in assets each month. At this stage, this method appears to be a form of trading, profit-seeking with active transactions, hence the income or profit received from these digital currency activities is taxable. 

3. What is the limit of tax deductions on losses in cryptocurrency trading? 

There is no limit determined for loss of business. Current-year claims can be done under S.44 (2) from aggregate income. If it is not fully absorbed, it can be claimed in the next year under S.43(2), ACP 1967. Account and document preparation needs to be prepared accordingly.

Crypto as an investment

1. Is there a minimum amount of profit made on crypto investments and trades that are eligible for tax?

There is no minimum amount for profit in cryptocurrency trading and investment that is considered taxable. Tax income rates on digital currency depend on the taxpayer’s category – business, partnership, limited liability partnership or as individual.

2. How long is the duration to differentiate between assets that are considered as trading and as investment, because trading is taxed while investment is apparently not taxed?

The indication of active trading is very much dependent on the facts and circumstances of the said transactions. Any sequence/frequency/duration transactions of digital currencies must be considered based on the badges of trade in the Guidelines to determine its taxability.

3. How to report to IRBM (LHDN) if the digital currency investment is a mixture of Spot and Futures?

“Spot” in digital currency trading is a process of buying and selling digital currencies like Bitcoin and Ethereum for an instant transfer. In other words, digital currencies are transferred immediately between market traders (buyers and sellers).

“Futures” in digital currencies investment is a contract with an agreement to buy or sell specific digital currencies in the future.

Taxability on these digital currencies that involve Spot and Futures is based on whether the profit/gains derived from the investment are capital or revenue in nature.

4. If I buy crypto using the DCA method, is it considered as a “frequent transaction” under the badges of trade and will I be taxed when I sell for profit later on?

Dollar-Cost Averaging (DCA) is a crypto investment method that allows you to get a low buy and sell price. By using the DCA method, most crypto traders will invest a certain amount of money in assets each month. At this stage, this method appears to be a form of trading, profit-seeking with active transactions, hence the income or profit received from these digital currency activities is taxable. 

5. Is there any minimum period to hold a cryptocurrency before it is considered as an investment which is capital in nature?

There is no specific period and is based on the facts of the case.

General

1. When will the IRBM (LHDN)  guidelines on crypto & taxes go into effect?

The Guidelines on Tax Treatment of Digital Currency Transactions take into effect immediately and it is also applicable retrospectively.

2. If the crypto tax guidelines were published in August 2022, what will happen to me if I am unable to access my records before August 2022?

It is the responsibility of the taxpayer to keep any record for taxation purposes as per Section 82 of the Income Tax Act 1967 (ITA). Every person must keep and retain sufficient records to enable the income or loss from their business to be readily ascertained. If the records cannot be accessed, it is advisable to look into other forms of information i.e. banking transaction records, that relate to that particular transaction in case it is requested by the IRBM (LHDN)

3. If we cash out crypto and transfer it to our Bank Account/ASB/Tabung Haji, etc we paid the yearly zakat. Can we deduct Zakat from our declaration to IRBM (LHDN)?

The distribution of the dividend by Tabung Haji is after the deduction of Zakat. Therefore, Zakat was paid at source and the dividend income is exempted from tax on the hand of the receiver. 

Subsection 6A(3) of ITA 1967, allows in the form of Rebate, the deductions for any payment of obligatory zakat and fitrah in the base year.

Firstly, the cashing out of crypto needs to be assessed based on the facts of the case to identify its taxability. Then any form of payment for zakat by that particular person is deductible according to Subsection 6A(3) of ITA 1967.

4. What does ‘realised” mean? If I trade crypto but I keep my profits in crypto, is that considered as realised? Or is realised only when I convert from crypto to RM?

Realised means the actual total amount received from the sales transaction. The appreciation of Crypto is not taxable until it is disposed of. Any realised profit from the trading of crypto is subject to tax and needs to be converted to RM for declaration purposes.

5. What if we started crypto trading in 2021 but did not keep any records or screenshots of our payments/capital/revenue. What should we do?

It is responsible for taxpayers to keep any record for taxation purposes according to Section 82 of Income Tax Act 1967 (ITA 1967). Any person must keep and retain sufficient records to enable the income or loss from the business to be readily ascertained. The failure to do so is an offence under Section 119A, ITA 1967.

Under the Self-Assessment System (SAS), the taxpayer is required by law to determine his taxable income, compute chargeable income tax, submit the income tax return form and make tax payment for the year of assessment concerned.

Based on the IRBM (LHDN) Tax Audit Framework, the IRBM (LHDN) will use its best judgment method or approach to determine the income for tax purposes when adequate records fail to be furnished.

6. For Muslim investors, do I need to declare my profit to IRBM (LHDN) or to Zakat authorities, and which is the priority?

If the income is taxable, reporting it under S.77 / S.77A, ACP 1967 is needed.

Subsection 6(A)(3), ITA 1967 allows tax rebate to any zakat or fitrah contribution.

7. If there is profit selling BTC and losses in ETH, can they offset for the year?

If trading crypto is done as a business, then the losses can be offset in the Profit & Loss account.

8. If there is loss in sales, can I claim for loss in my personal income tax?

If crypto activity is considered as part of business activities, the current loss year is deductible from income aggregate based on S.44 (2) ACP 1967.

9. Can I pay IRBM (LHDN) tax with digital currencies?

Tax should be paid in RM and other methods that have been determined such as cash, bank account transfer and others. Digital currencies cannot be used for tax payments.

10. How does IRBM (LHDN) define “long term”?

No specific definition, it is based on a case-by-case basis.

11. Where should I declare my earnings (BE Form) from the profits gained from the trades I made on my Bitcoin?

If it is a business income, it is under S.4(a), ACP 1967.

12. If the source of income is my salary, and I buy crypto using a DCA method with Luno on a weekly basis, but only sell it four years later (for example), do I need to declare the gains four years later?

Salary needs to be declared in the respective year of assessment. The taxability of any appreciation realised after 4 years will be determined based on the badges of trade.

13. Do we need to register as a business when declaring tax? If so, what is the MSIC code for ROB for businesses related to crypto trading?

Please refer to SSM on the code for ROB purposes.

14. My father is retired and he is 60 years old, and he invests in crypto with his pension/EPF money. If he sells his profit and withdraws it, does he have to pay tax?

It depends on the facts of the case by looking at the badges of trade.

15. How much transaction is considered an investment which is revenue in nature?

There is no specific amount of transactions and it depends on the facts of the case.

16. If I had worked overseas for many years and accumulated Bitcoin through my overseas salary. Then I decided to retire in Malaysia and sell my Bitcoin in Luno to pay for my living expenses. Are my proceeds taxable since I acquired Bitcoin through my overseas salary which I had paid taxes for?

Remittance for individuals is exempted until 31 Dec 2026 provided it has been taxed at the origin country. Please refer to PUA 5/2022.

17. Does Luno allow customers to download their trading history?

Luno allows customers to download their entire trading history from their Luno account on www.luno.com. Go to the Wallet you want, for example, BTC wallet. Scroll to the bottom and click Download Statement. Customers would need to calculate and declare their own taxes to IRBM accordingly. (This answer is provided by Luno MY)

DISCLAIMER: Please note, the views given above are based on the facts that have been presented. If the actual facts of a case are different from the information presented, then the position given is not applicable. It is not permitted to use this information for advertising, marketing and service purposes and to disseminate information without prior permission from the IRBM (LHDN).

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