While most bitcoin transactions are subject to capital gains tax on the income it generates, there are several territories throughout Asia that do not tax gains on bitcoin price fluctuation in an effort to encourage innovation and the adoption of digital currency.
Hence, making it easier for investors to hold, sell, and buy cryptocurrency with looser tax liabilities.
Hong Kong is one of these territories. In fact, cryptocurrency is only taxed in certain situations.
For instance, if you are a non-corporation and you purchase crypto for long-term investment purposes, you do not owe tax on the profits you make when it is sold.
Otherwise, if you are a corporation and you purchase crypto as a long-term investment, the profits will be subject to tax when you cash in.
Some other territories in Asia that do not tax bitcoin gains include:
MalaysiaIn Malaysia, cryptocurrency does not qualify for capital gains tax because it is not viewed as property or even legal tender by authorities; hence, it is tax-free.
As a matter of fact, any crypto transaction that is done passively, unplanned, unsystematically, or more for capital gains is not taxed on the profits from their sales.
However, any proceeds made from systematic and active crypto trading are taxed on the sale. This is because it qualifies as a profession, in which case, the profits are regarded as revenue and are thus taxed as such.
Likewise, any company that deals in cryptocurrency as a business is also subject to tax on the sales of the crypto in the country.
SingaporeIn Singapore, neither businesses nor individuals are charged capital gains tax on crypto sales because there is just no such concept there.
However, if you are a company in Singapore whose main business is crypto trading, then you are liable for income tax.
Likewise, if you are a company in Singapore that accepts cryptocurrency as payment, you must also pay income tax on the revenue.
This is because, in Singapore, bitcoin units are not considered tangible property.
Hence, it is not viewed as a source of legal tender in and of itself; therefore, when it is traded, it is not deemed as a money transaction.
Instead, the exchange of bitcoin tokens is viewed as a trade, in which case, they are taxed as goods and services rather than as income.
Hainan, ChinaHainan, China is a relatively remote location; hence, it is not as prone to cryptocurrency regulation as other territories.
In fact, it is home to over 170 international blockchain startups, a blockchain research center, and the core test zone for China's blockchain technology development with a goal of becoming the center of offshore innovation and more.
These are just a few of the countries in Asia that make it easier to trade bitcoin practically tax-free in an effort to foster more innovation and trading of digital currency.
In the meantime, to check bitcoin's daily price movements and market capitalization statistics before investing, use a cryptocurrency price checker.
Note: The information in this site is for general guidance only. Users of this site are advised to take professional advice before taking practical tax decisions.
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