Virtual Currency Withdrawal Tax in Taiwan: Do You Need to Pay? How to Save Legally in 2025

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As virtual currency continues to gain traction in global financial markets, understanding the tax implications of crypto transactions has become increasingly crucial—especially for investors in Taiwan. In Taiwan, digital assets are classified as "virtual commodities" rather than legal tender, and profits from trading them are treated as property transaction income under Article 14, Paragraph 1, Category 7 of the Income Tax Act.

The key moment for tax liability? When you withdraw crypto into fiat currency—that is, when you convert your digital assets into cash and transfer them to your bank account. This article provides a comprehensive breakdown of the 2025 virtual currency tax regulations in Taiwan, covering taxable scenarios, calculation methods, loss handling, reporting procedures, and legitimate tax-saving strategies.

Whether you're a casual trader or managing large-scale investments, this guide ensures you stay compliant while optimizing your tax position.

When Is Virtual Currency Taxable?

Not every crypto transaction triggers a tax event. The critical factor is withdrawal to fiat—holding assets on an exchange without cashing out does not incur immediate tax liability.

Taxable events are primarily divided into two categories based on the source of the final bank transfer:

✅ Domestic-Sourced Income

You have domestic-sourced income if:

Examples:

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✅ Foreign-Sourced Income

You have foreign-sourced income if:

Examples:

Important Note: Even if you trade on offshore platforms like Binance, if you ultimately withdraw through a Taiwan-based intermediary, the income is still considered domestic-sourced. Many investors overlook this nuance—don’t be one of them.

How Is Crypto Withdrawal Tax Calculated?

💡 Domestic Income: Part of Comprehensive Income Tax

Domestic crypto gains are added to your annual comprehensive income total, which includes:

Formula:

Crypto Taxable Profit = Withdrawal Amount – Initial Investment Cost (must be provable)

This profit is then combined with other income and taxed at progressive rates under the Individual Comprehensive Income Tax system.

Example:

Mr. Lee’s 2025 annual income:

Total comprehensive income: NT$2.5 million

He will pay tax on this full amount at the applicable marginal rate.
⚠️ Note: You must keep records proving your initial investment cost—otherwise, the tax authority may disallow deductions.

💡 Foreign Income: Subject to Basic Taxation Rules

Foreign-sourced crypto profits are included in your Basic Taxable Income (基本所得額), which comprises:

If your total basic income exceeds NT$7.5 million, the excess is taxed at a flat 20% under the Alternative Minimum Tax (AMT) system.

However, if your overseas income is under NT$1 million, you’re exempt from filing it.

Example:

Ms. Lin’s 2025 income:

Total basic income: NT$4.5 million

Since this is below the NT$7.5 million threshold, she owes no additional basic tax.
But because her foreign income exceeds NT$1 million, she must still report it during tax season.

Special Tax Scenarios You Should Know

🔹 Scenario 1: Basic Tax > Comprehensive Tax

If your calculated basic tax exceeds your regular comprehensive income tax, you must pay the difference.

🔹 Scenario 2: Basic Tax ≤ Comprehensive Tax

You only pay the comprehensive income tax—no extra charge.

🔹 Reporting Code for International Transfers

When receiving foreign wires from overseas exchanges, declare under:

Form 268 – Purchase/Sale of Foreign Virtual Assets

This helps authorities identify cross-border crypto activity and ensures compliance.

Frequently Asked Questions (FAQ)

Q1: Do I need to report if I withdraw less than NT$500,000?
A: Yes. While banks only report single transactions over NT$500,000 to authorities, all taxable gains must be declared, regardless of amount.

Q2: How do I report domestic vs. foreign crypto income?
A:

Q3: What if I made a loss? Can I offset it?
A: Yes. Capital losses from crypto can be used to offset gains in the same year. Unused losses may be carried forward for up to three years.

Q4: Are NFT or DeFi transactions taxable?
A: While current guidance focuses on major cryptocurrencies, any profitable digital asset disposal—including NFTs and yield farming rewards—could be subject to taxation if converted to fiat.

Q5: Can I avoid taxes by keeping funds offshore?
A: No. Taiwan taxes residents on worldwide income. Unreported foreign earnings risk penalties, audits, or legal consequences.

👉 Learn how top investors manage global portfolios while staying tax-compliant across jurisdictions.

Legal Ways to Optimize Your Crypto Taxes

While you can't avoid taxes entirely, smart planning can reduce your burden:

✅ Use Direct USD Wire Transfers

Instead of converting crypto to TWD first, consider withdrawing USD directly to your foreign currency account in Taiwan via overseas exchanges.

For Small Traders (< $50,000 USD):

For Large Traders (> $50,000 USD):

💡 Pro Tip: Avoid multiple small transfers to bypass scrutiny—they add up and may trigger reporting requirements.

Keep Impeccable Records

Regardless of platform or strategy:

These records are essential for:

Final Thoughts

The crypto tax landscape in Taiwan is evolving rapidly. As digital assets become more mainstream, regulatory clarity around cross-border transactions, stablecoins, and decentralized finance (DeFi) is expected in the coming years.

To future-proof your investments:

By understanding the rules today, you protect your profits tomorrow.

👉 Get ahead with real-time portfolio tracking and tax-ready reports designed for global crypto investors.

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