This article “FTX incident marks Taiwan’s first official position on crypto asset taxation” is the second article for the series of “Crypto Assets Taxation in Taiwan”.
Photo by Kanchanara on Unsplash.
FTX Bankrupcy impacted Hundred Thousands of Taiwanese Investors
FTX collapsed in early November 2022, following a report by Coinbase that questioned its solvency. Then, on November 11, FTX filed for bankruptcy and its former CEO Sam Bankman-Fried was arrested for fraudulent accounts. Newly appointed CEO John J. Ray III presented FTX’s situation to the U.S. Congress, attributing FTX’s collapse to mismanagement, board governance, excessive leverage, and failures of internal controls and external oversight. He also suggested that FTX customers would not recover all of their losses.
The fallout from FTX also affects thousands of Taiwanese investors. According to a statistic by Coingecko, Taiwan was ranked as the 7th most affected country with a possible share of losses of 3.2%, Taiwanese crypto experts roughly estimated that more than 300,000 local investors were affected with possible losses of more than NTD 15 billion (US$500 million). Since FTX has no subsidiary in Taiwan and investors bought crypto assets directly from FTX website, investors could not help but form a victims’ association and try to participate in the litigation process abroad. Huang Tien-mu, chairman of the Financial Supervisory Commission, mentioned at a press conference in early 2023 that Taiwan government agencies are considering a special law to regulate crypto asset transactions. However, there is still no consensus on the characterization, supervision mode and data protection of crypto assets among various government agencies, not to mention a specific timeline for the legislation of this special act. Before a special act is enacted, the official regulation and supervision of crypto asset transaction can only function within the scope of anti-money laundering.
MOF agrees Tax Deductibility of FTX Losses
Regarding the tax deductibility of the losses from FTX’s bankruptcy, Su Chien-Rong, the former Minister of Finance, responded to the questions on the FTX incident in Parliament that if taxpayers have declared the income from property transactions, the losses from crypto asset transactions can be deducted/offset against the declared income from property transactions. Su further added that if the losses from crypto asset transactions occurred overseas, such as the losses from FTX, they could be deducted/offset against the overseas property transaction income in the same tax year. Later, on November 18, 2022 (the “MOF Nov. 18 Press Release”), a press release from the Ministry of Finance reiterated the same position.
The MOF Nov. 18 Press Release can be summarized as follows:
- gains and losses from crypto asset transactions should be classified as income or loss from property transactions.
- crypto asset transactions made directly with FTX should be considered as overseas transactions. Gains or losses arising therefrom shall be deemed to be foreign income or loss.
- the gains and losses arising from the direct transaction with FTX can only be deducted/offset against the income from the property transaction occurred abroad.
MOF Nov. 18 Press Release has very limited Scope, only covers Income Taxation
Although the MOF’s November 18 press release is the first time Taiwan’s tax authorities express their position on the taxation of crypto asset transaction and how to determine whether domestic or foreign the income or loss arise from – transaction with either domestic or foreign exchange, however, this press release limited itself to a very small scope, covering only the income and loss from transaction of crypto assets. Not only does its applicability depend on whether the Taiwanese investors have reported the income or loss from transaction of crypto asset and/or other property, but it also leaves blank various tax issues related to crypto assets, such as value added tax (VAT) when buying and selling crypto assets, and special property and transaction tax.
在 Coinbase 的一份報告質疑其償付能力後，FTX 於 2022 年 11 月初崩盤。 然後，在 11 月 11 日，FTX 申請破產，其前首席執行官 Sam Bankman-Fried 因欺詐被捕。 新上任的首席執行官 John J. Ray III 向美國國會說明了 FTX 的現況，將 FTX 的倒閉歸咎於管理不善、董事會治理失效、過度槓桿化以及內部控制和外部監督的失敗。 他還指出FTX 客戶很可能不會收回所有投資。
FTX 事件還影響了數以千計的台灣投資者。 根據 Coingecko 的統計，台灣被列為第七大受影響國家，可能的損失份額為 3.2%， 台灣加密專家粗略估計，超過 300,000 名本地投資者受到影響，可能損失超過新台幣 150億元（5 億美元）。 由於 FTX 在台灣沒有子公司，投資者直接從 FTX 網站購買加密資產，投資者不得不成立受害者協會，並試圖參與國外的訴訟程序。 金融監督管理委員會主席黃天牧在 2023 年初的新聞發布會上提到，台灣政府機構正在考慮制定特別法來規範加密資產交易， 然而各政府機構對加密資產的特徵、監管模式和個資保護仍未達成共識，更不用說該特別法案立法的具體時間表。 在特別法案頒布之前，官方對加密資產交易的監管只能在反洗錢的範圍內發揮作用。
關於FTX破產損失的稅收抵扣問題，前財政部長蘇建榮在國會就FTX事件回應提問時表示，如果納稅人申報了財產交易收入，加密資產交易損失可以抵扣。 從申報的財產交易收入中扣除/抵銷。 蘇前部長進一步補充說，如果加密資產交易的損失發生在海外，例如 FTX 的損失，它們可以在同一納稅年度的海外財產交易收入中扣除/抵消。 隨後，2022 年 11 月 18 日（“財政部 11 月 18 日新聞稿”），財政部的新聞稿重申了同樣的立場。
財政部 11 月 18 日的新聞稿的重點可以概括如下三項：
- 直接與FTX進行的加密資產交易應視為境外交易。 由此產生的收益或損失應視為國外收入或損失。
儘管財政部 11 月 18 日的新聞稿是台灣稅務機關首次就加密資產交易的稅收以及如何確定收入或損失產生於國內還是國外的立場表明立場 – 與國內或外匯交易，但是，這 新聞稿將自己限制在一個很小的範圍內，僅涵蓋加密資產交易的收入和損失。 它的適用性不僅取決於台灣投資者是否申報了加密資產和/或其他財產交易的收入或損失，加密資產相關的各種稅收問題則未置一詞，例如增值稅（VAT） 買賣加密資產，以及特殊財產和交易稅。