Income from cryptocurrency activities in Malaysia, including trading, mining and exchange, is subject to income tax under Section 4 of the Income Tax Act 1967.
This is because digital currencies are classified as commodities that can be considered as a source of business income.
The Ministry of Finance (MoF) explained that this move is in line with international tax practices. The Inland Revenue Board (IRB) has also issued guidelines on the tax treatment of digital currency transactions, including the imposition of income tax for reference by taxpayers.
According to the MoF, LUNO Malaysia, which was registered with the Companies Commission of Malaysia in 2015 and approved by the Securities Commission in 2019, offers services for buying, selling and storing cryptocurrencies such as Bitcoin and Ethereum, including sharia-compliant products such as Islamic betting.
LUNO Malaysia was able to record a revenue of RM254 million but only paid RM3.8 million in taxes for the period 2019 to 2024 to the government.
Regarding the amount of income tax paid by the company, the MoF explained that corporate income tax is not calculated based on gross profit alone.
Taxable income is after taking into account allowable expenses and specific exemptions under current tax laws.
