Malaysia’s Ministry of Finance has confirmed that income from crypto activities is taxable under the Income Tax Act 1967, The Edge reported.
The clarification came in response to a question from Lim Guan Eng (PH-Bagan), who highlighted that LUNO Malaysia recorded RM254 million in revenue but only paid RM3.8 million in taxes between 2019 and 2024.
The ministry explained that digital currencies are treated as commodities, and profits from trading, mining or exchange fall under business income.
It added that this position is in line with international tax practices, and the Inland Revenue Board (IRB) has issued guidelines on how such transactions should be treated.
According to the IRB, Malaysia does not tax capital gains. If an individual buys a cryptocurrency, holds it for an extended period of time, and later sells it at a profit, the gain is treated as capital in nature and is not taxable.
However, if the activity is carried out as a business, such as operating an exchange, mining or frequent trading, the profits are classified as revenue and taxed accordingly.
The ministry also highlighted that digital services are subject to service tax, which since 2020 has applied not only to local providers but also to foreign firms supplying services directly to Malaysian consumers.
This ensures equal treatment between domestic and overseas platforms, including cryptocurrency exchanges.
LUNO, incorporated in Malaysia in 2015 and approved by the Securities Commission in 2019, offers trading and storage services for digital assets such as bitcoin and ethereum, as well as shariah-compliant products including Islamic staking.
The company has not commented publicly on the matter.
On corporate tax contributions, the ministry stressed that assessments are based on taxable income after allowable expenses and deductions, not on gross revenue.
It added that the exact amount of tax paid by companies is protected under Section 138 of the Income Tax Act 1967, in line with international norms on taxpayer confidentiality.
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