KUALA LUMPUR, August 29, 2025 – The Malaysian Finance Ministry (MoF) has clarified that income generated from digital cryptocurrency activities—including trading, mining, and exchanges—is taxable under Section 4 of the Income Tax Act 1967, as digital currencies are treated as commodities that can constitute business income. This alignment with global tax norms was officially confirmed in response to a parliamentary enquiry regarding recent crypto earnings.
The clarification follows a question from Member of Parliament Lim Guan Eng (PH–Bagan), who pointed out the discrepancy between the revenue reported by Luno Malaysia—RM254 million between 2019 and 2024—and the RM3.8 million in tax paid. In its response, the MoF emphasised that corporate income tax is calculated based on taxable income after allowable deductions, not on gross revenue. Furthermore, the exact amount of tax paid remains confidential under Section 138 of the Income Tax Act 1967, a standard international practice designed to protect taxpayer privacy.
In addition to income tax, the Finance Ministry confirmed that service tax applies to digital services provided by both local and international platforms, as enforced under the Service Tax Regulations 2018. Since January 1, 2020, foreign digital service providers facilitating business-to-consumer (B2C) services to Malaysian users are also subject to service tax. This ensures parity between local and overseas providers, extending to cryptocurrency trading platforms.
