KUALA LUMPUR, The Ministry of Finance (MoF) has confirmed that income generated from cryptocurrency-related activities is taxable under the Income Tax Act 1967.
The clarification came in response to a query from Lim Guan Eng (PH-Bagan), who pointed out that LUNO Malaysia recorded RM254 million in revenue but paid only RM3.8 million in taxes between 2019 and 2024.
According to the MoF, digital currencies are treated as commodities, meaning that profits derived from trading, mining, or operating exchanges are considered business income and subject to tax. This approach, the ministry noted, is consistent with international practices. The Inland Revenue Board (IRB) has also published guidelines on the tax treatment of such activities.
However, the IRB clarified that Malaysia does not impose capital gains tax. As such, if an individual buys cryptocurrency, holds it long-term, and later sells it for a profit, the gain is regarded as capital in nature and is not taxable. By contrast, frequent trading, mining operations, or running an exchange are classified as business activities, and earnings are taxed accordingly.
The MoF further emphasized that digital services are subject to service tax. Since 2020, this rule has applied not only to local providers but also to foreign companies offering services directly to Malaysian consumers — ensuring equal treatment for domestic and overseas platforms, including crypto exchanges.
LUNO, established in Malaysia in 2015 and licensed by the Securities Commission in 2019, provides trading and storage services for digital assets such as bitcoin and ethereum. It also offers shariah-compliant features, including Islamic staking. The company has not issued a public statement regarding the matter.
On concerns over corporate tax contributions, the MoF stressed that tax assessments are based on net taxable income after allowable expenses and deductions, not on total revenue. The ministry also underscored that details of tax paid by individual companies remain confidential under Section 138 of the Income Tax Act 1967, in line with global standards on taxpayer privacy.
