Malaysia cracks down on crypto tax evaders with Ops Token

The NFT Unicorn 91df307f-720f-4f9b-8dca-e4b91a7bdf4f Malaysia cracks down on crypto tax evaders with Ops Token Crypto News

Malaysian federal agency Inland Revenue Board (IRB) conducted a special operation dubbed “Ops Token” to reduce tax revenue leakage from crypto trading. 

Local media outlet The Malaysian Reserve reported that 38 personnel from the Royal Malaysia Police and CyberSecurity Malaysia (CSM) raided 10 different locations within Klang Valley.

The operation targeted companies that did not properly report their crypto trading activities to the federal agency. The initiative aligns with the local government’s desire to reduce tax revenue leakage and improve the country’s tax administration.

Malaysian police acquires tax evasion evidence

The authorities alleged that several limited liability partnerships and corporate entities were formed for crypto trading. The federal agency believes that these entities avoided declaring 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.”

Furthermore, the IRB said that the data obtained in the operation will be analyzed to determine the value of crypto assets traded and profits generated. This will help the federal agency to identify the value of the tax leakage that was not properly declared to the IRB.

IRB chief warns crypto traders to declare taxes

IRB CEO Datuk Abu Tariq Jamaluddin explained that individuals engaged in crypto trading in the country are subject to Malaysia’s income tax rules. The official warned crypto traders to properly declare their crypto taxes to nearby IRB offices as soon as possible before the IRB takes compliance action.

The IRB expects the operation to increase Malaysia’s tax revenue by increasing tax efficiency and reducing leakages. The agency also believes that it will contribute to the sustainability of the country’s revenue collection.

Related: Microsoft pours $2.2B into Malaysia for cloud, AI expansion

Crypto regulations in Malaysia

In Malaysia, cryptocurrency is legal and regulated by the Securities Commission (SC), a statutory body responsible for regulating capital markets in the country. Tokens are considered securities in the country, subjecting them to its securities laws.

The country’s central bank does not regard crypto or tokens as payment instruments or legal tender. Furthermore, crypto-focused businesses are subject to the country’s income tax laws.

Magazine: ‘Bitcoin Layer 2s’ aren’t really L2s at all: Here’s why that matters

Source: Cointelegraph