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Crypto Taxation Laws – A Look At Cryptocurrency Taxes In Asian Markets

The long-standing arguments on whether to, or not to, enforce a crypto taxation laws or capital gains tax on cryptocurrency trading and transactions is glaringly coming to an end. It is believed that in order to legalize cryptocurrency as a legal tender, there’d be need for documented cryptocurrency taxation by the government.

Asia is a major player in the world of cryptocurrencies. China is responsible for more than half the world’s BTC mining hash. Moreover, Japan’s government has made Bitcoin a legal currency in the country. South Korea is also home to two of each five Ethereum exchanges and has the most dynamic crypto markets.

Despite all that, Asian countries are lagging behind in terms of regulation and taxation. While some investors see that as a good thing as they get to keep all their earnings, having no clear tax provisions is ultimately detrimental to the economy, and will likely incentivize governments to ban crypto activities, hurting the industry, and potentially crypto investments, in the long run.

This article gives an overview on current crypto taxation laws in Asian countries. 

How Enforcement of Crypto Taxation Laws in Asia Will Impact The Industry Positively

Crypto Taxation & Cryptocurrency Tax Laws - How Enforcement of Capital Gains Laws in Asia Will Impact The Industry Positively
Cryptocurrency is here to stay, so we hear on CryptoTwitter everyday. But there are some fundamental situations that needs to take place for this speculated ‘store of value’ to really have its foot to stand on, and that is, government’s ability to enforce taxation on businesses and individuals making gains with this currency. So, either we like it or not, crypto taxation needs to be enforced for government to really entertain any form of adoption. Asian countries dominates the cryptocurrency spaces but the governments are finding it a bit hard to really tax crypto transactions. Let’s find out more.


China has a rather negative stance on cryptocurrencies. They have banned ICOs since 2017 and have cracked down on crypto trading activities in 2018.

With that being said, their central bank has recently announced that it has been working on its own state-backed digital currency that could potentially rival Bitcoin and bring crypto adoption to the masses.

Crypto income does not likely fall strictly under any income category, other than “incidental income,” according to Chinese laws. However, as of now, they have not given any clear regulations on the taxation of cryptocurrencies. 

Most cryptocurrency holders in China are likely not inclined to declare their gains on tax returns since crypto trading is viewed as an illegal activity in the country


Japanese traders have made considerable gains in their crypto activities. But according to tax authorities, a lot of these traders are not declaring their income.

This is largely due to Japan’s extremely high tax rate on cryptocurrencies, a whopping 50 percent, and in some cases, more. Around 50 traders and 30 firms in Japan had not declared their crypto earnings totaling over 10 billion yen ($92.3 million).

Japan categorizes cryptocurrency gains under “miscellaneous income”, which can be taxed up to 55 percent, which is a far cry from taxes imposed on earnings from stocks, at 20 percent.

The Tokyo Regional Taxation Bureau required crypto exchanges to give out their users’ transaction data in 2018, in order to compile a list of accounts that made tremendous earnings.

Japanese tax authorities are very clear about their intentions to pursue tax evaders who hide large incomes, charging them with criminal offenses and penalties. This is not unlike their counterparts in the US who have also been actively pursuing cryptocurrency taxes and tax avoiders.


Singapore is one of the very few crypto tax havens of the world. Individual investors and businesses who hold cryptocurrencies are not taxed as the country itself does not collect capital gains tax.

On top of that, their government’s tax agency is proposing to remove goods and services tax (GST) from cryptocurrency transactions that function as a medium of exchange.

This draft will hopefully pass into legislation, which is scheduled for January 2020. 

The Ministry of Finance has strict guidelines on what they consider as “digital payment tokens”. Particularly, it should be fungible, and not pegged to any conventional currency like the dollar. 

This means that non-fungible-tokens like Cryptokitties and stablecoins like Tether do not qualify.

Hong Kong

In Hong Kong, income generated from capital assets is tax free, including crypto gains. This is another tax haven for crypto hodlers!

With that being said, if you are professional crypto trader, you are required to pay taxes

As opposed to a hobbyist trader, a professional trader likely:

-lives off their trading profits

-spends a huge amount of time trading

-rents an office or hires staff

-day-trades or holds assets for very short periods of time


Blockchain development in the Philippines is booming, especially in the northern part of the country. Although the government has not drafted any rules on crypto taxation, this does not mean traders are exempted from tax.

The National Internal Revenue Code (NIRC) states that any income generated in the Philippines, is taxable in general. Individuals or corporations may be taxed depending on the type of crypto transaction they obtain earnings on.

This includes income from trading, hodling, mining, buying/selling goods with crypto, etc.

If your particular coin is categorized as a property, you are required to pay capital gains tax. If it is considered as a stock, you will likely incur a fixed percentage tax.

South Korea

South Korea currently does not have any existing regulatory statute that specifically regulates cryptocurrencies. However, the Ministry of Strategy and Finance expressed their plans to tax cryptocurrencies and initial coin offerings.


As of today, the majority of Asian countries are still examining crypto technology and drafting their regulatory outlines. Better crypto tax regulations should come in the next few months or a year from now. Now, we can settle the argument on crypto taxation laws enforcement. It is very certain that it is just a matter of time for this event to unfold, collecting capital gains tax is just a time bomb waiting to explode in the cryptocurrency space, or else, the government will place outright ban on these commodities.

4 replies on “Crypto Taxation Laws – A Look At Cryptocurrency Taxes In Asian Markets”

You are right. In India this may still take more time. During the current lock down of covid19 countries are much interested to test the digital currency which still uses block chain technology.

Very Good Work Bro Very informative and It was an awesome post. I love reading your fantastic content. Thanks for sharing it with us.

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