IRB official Datuk Abu Tariq Jamaluddin cautions crypto traders to declare taxes or face penalties.
The Inland Revenue Board (IRB), a federal agency in Malaysia, implemented a unique operation known as “Ops Token” to mitigate the loss of tax revenue from crypto trading.
Local media outlet The Malaysian Reserve reported that 38 personnel from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) conducted raids at 10 distinct locations in the Klang Valley.
Moreover, companies that neglected to effectively disclose their crypto trading activities to the federal agency were the primary focus of the operation.
The initiative is consistent with the local government’s objective to enhance the country’s tax administration and decrease tax revenue leakage.
Malaysian Police Acquires Tax Evasion Evidence
The authorities said that multiple limited liability partnerships and corporate organizations were formed for cryptocurrency trading.
However, the federal agency believes that these entities failed to declare their taxes. The IRB said:
“Through the operation, cryptocurrency trading data stored in mobile devices and computers were found, and we successfully identified the value of digital assets being traded, which caused a very significant leakage of tax revenue.”
Additionally, the IRB stated that the data collected during the operation will be analyzed to ascertain the value of the crypto assets traded and the generated profits.
This will assist the federal agency in determining the value of the tax leakage that was not properly reported to the IRB.
IRB Chief Advises Crypto Traders to Declare Taxes
IRB CEO Datuk Abu Tariq Jamaluddin clarified that Malaysia’s income tax regulations apply to individuals who engage in crypto trading within the country.
Meanwhile, ahead of the IRB’s compliance action, the official cautioned crypto traders to promptly declare their crypto taxes to nearby IRB offices.
The IRB anticipates the operation to boost Malaysia’s tax collection by improving tax efficiency and minimizing leaks.
Additionally, the agency also believes that it will enhance the sustainability of the country’s revenue collection.
Crypto Regulations in Malaysia
In Malaysia, cryptocurrency is legal and controlled by the Securities Commission (SC), a statutory agency in charge of overseeing the country’s capital markets.
However, tokens are considered securities in the country, therefore they are subject to its securities regulations.
The country’s central bank does not consider crypto or tokens as legal tender or payment instruments.
Furthermore, the country’s income tax laws apply to crypto-focused businesses.
