Mission 5 · Sell & withdraw
Is crypto profit taxed?
LHDN's position on crypto profits for individuals: when it counts as investment, when it counts as business, when to report, and why this page is not tax advice.
Quick answer
- Malaysia has no capital gains tax. Ordinary investments that are rarely sold are usually not taxed.
- LHDN says that if your crypto activity is continuous, systematic, active and aimed at making a profit, it is treated as a business and taxed.
- This is not tax advice. Ask LHDN or an accountant about your own situation.
What you need
- Your records of purchases and sales (date, amount, price)
The source Daus used
At the 2024 National Tax Seminar, LHDN (HASiL) published answers to questions from the public about digital currency transactions. One of those questions mentions Hata, Luno and MX by name. LHDN’s basic reference is its guideline on the tax treatment of digital currency transactions.
Investment or business
Malaysia does not charge capital gains tax. So the question is whether your profit is capital in nature (an investment) or revenue in nature (a business). LHDN uses the badges of trade to decide, including:
- Frequency: buying and selling often looks more like a business.
- Holding period: holding for a long time looks more like an investment.
- Intention: buying in order to sell quickly and make a profit.
- Method: systematic and active, like a job.
In LHDN’s answer, a single transaction after holding for years is, in general, not subject to tax. But LHDN stresses that every case is judged on its actual facts.
If it is treated as a business
- The profit is reported in the year of assessment in which the crypto is sold, not every year you hold it.
- The value of the crypto has to be converted to ringgit at the time of the transaction.
- Losses from a crypto business can be deducted from your other income that year, and any balance can be carried forward for up to 10 years of assessment.
Airdrops and gifts
LHDN says free tokens such as airdrops are not income at the time they are received. But they may be taxed if the tokens were given as payment for goods or services.
What Daus does
Daus DCAs and holds for the long term, and does not trade daily. Daus keeps records of purchases (Auto-Invest has Order History in the app). This is Daus’s own story, not a guide for your situation.
Common questions on this topic
Are crypto gains taxed?
Malaysia has no capital gains tax. But LHDN says that if your crypto activity is continuous, systematic, active and profit-seeking, the gains count as business income and are taxable. This isn't tax advice; ask LHDN or an accountant.
Source: LHDN (HASiL) ↗
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