The surge in virtual currency investments has captivated global attention, attracting both genuine investors and opportunistic fraudsters. A common question among investors is whether virtual currency profits are taxable—a topic that has also become a frequent scam tactic. In this article, Attorney Cat Dong unpacks prevalent fraud schemes and how to avoid them on your journey to financial freedom.
Is Virtual Currency Investment Taxable? Taiwan’s Current Regulations Explained
To date, Taiwan’s Ministry of Finance has not issued definitive guidelines on taxing virtual currency transactions. However, existing laws and expert opinions suggest a framework: virtual currencies are classified as "virtual commodities," and profits from their sale or exchange are treated as property transaction income under Article 14, Paragraph 1, Item 7 of the Income Tax Act. Simply put, gains from virtual currency investments must be declared as income and taxed accordingly.
👉 Stay updated on crypto tax laws
"Pay Taxes to Withdraw Funds" – A Classic Scam Tactic
Beware if an exchange demands upfront tax payments for withdrawals—this is a hallmark of fraud. Legitimate tax authorities notify investors directly, never through third-party platforms.
5 Red Flags of Virtual Currency Scams
- Urgency to Deposit Funds
Scammers pressure victims with "limited-time offers" or false deadlines. Legitimate exchanges never rush investors. - "Exclusive" Personal Service
Fraudsters pose as customer support on Line/FB Messenger, guiding victims to transfer funds. Authentic platforms use official emails or announcements. - Withdrawal Restrictions
Claims like "upgrade to VIP" or "pay taxes to withdraw" are traps. Real exchanges impose no arbitrary limits. - Hidden Fees
Fake platforms charge exorbitant "processing fees" or "administrative costs" to erode investments. - Phishing Links
Scammers send fake URLs mimicking reputable exchanges to steal login credentials. Always verify links independently.
Common Virtual Currency Scams
Fake Exchanges
- Clones of well-known platforms (e.g., Binance).
- New "brands" offering unrealistic returns.
- Romance Scams
Fraudsters build trust over time, then push victims to invest—often with borrowed money. - USDT Scams
Fake "discounted" Tether sales or counterfeit tokens. - Shitcoins/Aircoins
Worthless coins promoted with "get rich quick" schemes. - Phishing Attacks
Malicious links disguised as wallet/exchange apps.
Can You Recover Stolen Funds? 5 Critical Steps
- Maintain Contact – Avoid alerting scammers prematurely.
- Verify Information – Cross-check URLs and call anti-fraud hotlines (e.g., 165 in Taiwan).
- Preserve Evidence – Save chat logs, transaction records, and wallet addresses.
- Consult a Lawyer – Specialized attorneys like Cat Dong can navigate legal processes.
- Submit Documentation – Provide comprehensive details to law enforcement.
Using Illegal Exchanges Risks Frozen Bank Accounts
Unregulated platforms may demand your bank details, exposing you to money laundering charges or account freezes. Always choose Taiwan government-approved exchanges listed on the Securities and Futures Bureau’s VASP registry.
Key Takeaway: Stay vigilant, verify platforms independently, and seek professional advice when in doubt.
FAQ
Q1: How are virtual currency profits taxed in Taiwan?
A: As property transaction income—declared annually with other income.
Q2: What if an exchange asks for taxes before withdrawals?
A: It’s likely a scam. Tax agencies never collect via third parties.
Q3: Can I recover funds sent to a scammer?
A: Possible with prompt action, evidence, and legal assistance.
Q4: Are all USDT transactions risky?
A: Only if bought from unverified sellers or fake platforms.
Q5: How to spot phishing links?
A: Check URLs manually; avoid clicking unsolicited links.