LHDN targets cryptocurrency traders for taxes

PUTRAJAYA: The Inland Revenue Board (LHDN) has identified several individuals and companies engaged in cryptocurrency trading as part of efforts to curb tax revenue leakage and enhance national tax administration.

LHDN chief executive officer Datuk Dr Abu Tariq Jamaluddin said the high frequency of cryptocurrency trading transactions has prompted LHDN to review data for potential tax implications.

“We understand that if there are a lot of transactions, profits from cryptocurrency trading are taxable.

“Individuals engaged in high-volume transactions are not reporting these activities to us,” he told reporters after presenting certificates to participants in the Tax Corporate Governance (TCG) Programme yesterday, Bernama reported.

Recently, LHDN launched Ops Token in collaboration with the police and CyberSecurity Malaysia (CSM) to combat tax revenue leakage in cryptocurrency trading, covering 10 locations across the Klang Valley.

Earlier in his speech, Abu Tariq highlighted that the TCG programme aims to provide a comprehensive understanding of taxpayer management, tax administration procedures, and tax risk management.

It also aims to foster a collaborative relationship between taxpayers and LHDN to resolve tax matters through consultation rather than confrontation.

“Through TCG, organisations can improve their comprehension of tax regulations related to business activities and fortify their internal systems for sustained tax compliance,” he said.

LHDN introduced TCG on March 1, 2022, as part of its initiative to bolster voluntary compliance, emphasising cooperation between taxpayers and LHDN as the national tax authority.

The programme was launched in two phases: a pilot project running from June 1, 2022, to June 30, 2024, followed by full implementation starting July 1 this year.

Abu Tariq added that individuals engaged in cryptocurrency trading in Malaysia are liable for income tax, and those needing clarification can access the guidelines on the LHDN website.