The Inland Revenue Board (IRB) in a recent announcement told crypto investors not to be exempt from declaring their profits through the annual income tax return.
However, the claim is only applicable to investors who are actively trading in crypto exchange platforms.
The IRB also explained that they will consider the profits earned through the crypto platform the same as the profits received through conventional business.
With reference to Section 3 of the Income Tax Act 1967, the tax levied is based on income accumulated in or derived from Malaysia, or received in Malaysia from abroad.
At the same time, the IRB also acknowledges that the act does not clearly specify the amount of profit or loss that should be taxed.
This causes tax officers to scrutinize each case thoroughly to determine the extent to which profits from cryptocurrency investment activities should be taxed or not.
"If the transaction exceeds the capital gains, passive or occasional, unplanned or unsystematic, then the profit from the sale and purchase is tax-free income.
"But for those who are actively involved in cryptocurrency, systematically and periodically, the party should be subject to income tax." said the Chief Executive Officer of the IRB Office, Ranjeet Kaur.
The individuals involved can submit a tax return through Form B before or on 30 June each year.
