Legal Insights

The Virtual Asset Services Act, promulgated on July 22, 2026, defines a “virtual asset” in Subparagraph 1 of Article 3 as a value that utilizes cryptography, distributed ledger technology, or other similar technology, can be digitally stored, exchanged, or transferred, and is used for payment or investment purposes. Bitcoin, Ether, and other commonly traded virtual assets may therefore fall within this statutory definition.

Subparagraph 6 of the same Article separately defines a “stablecoin” as a virtual asset that represents a value linked to a single or multiple fiat currencies for the purpose of maintaining a stable value.

Accordingly, where virtual assets or stablecoins fall within these definitions under the Virtual Asset Services Act, their sale by a business entity is, under the Ministry of Finance’s latest interpretation, outside the scope of business tax.

II. The Key Is That Virtual Assets Themselves Do Not Have the Nature of Consumption

What is important about the Ministry of Finance’s latest Order is not merely its conclusion that business tax should not be imposed, but also the reasoning underlying that conclusion.

Taiwan’s Value-Added and Non-Value-Added Business Tax is, in substance, a consumption tax. In other words, the fundamental principle underlying business tax is to impose tax on the ability to pay reflected by “consumption.” Payment instruments, or investment instruments used for savings or preservation of value, do not themselves have the nature of consumption. Their transfer therefore falls outside the scope of business tax. When a consumer uses New Taiwan Dollars to purchase goods, it is the goods purchased that constitute consumption, rather than the New Taiwan Dollars used as the means of payment. The same principle applies where virtual assets such as Bitcoin function as a means of payment. The mere acquisition, holding, or transfer of such a payment instrument does not itself constitute final consumption.

The Virtual Asset Services Act now further limits the statutory definition of virtual assets to digital value used for “payment or investment purposes.” On this basis, the Ministry of Finance considers that virtual assets such as Bitcoin and Ether, as well as stablecoins functioning as multipurpose payment instruments, do not themselves have the nature of consumption. Transactions involving these assets should therefore not be subject to business tax.

III. The Same Tax Law Position Had Already Been Advanced in 2019

It is worth noting that the tax law position now adopted by the Ministry of Finance had already been discussed several years earlier.

In 2019, attorney Cheng-Yu (Paul) Ma published two articles in Root Law Journal (《植根雜誌》), entitled “Business Tax Issues in Bitcoin Transactions (Part I)” and “Business Tax Issues in Bitcoin Transactions (Part II),” analyzing the legal nature of Bitcoin and the business tax issues arising from Bitcoin transactions.

At that time, Taiwan had not yet enacted the Virtual Asset Services Act, and the legal characterization of virtual assets was considerably less developed than it is today. Nevertheless, based on the fundamental principles of business taxation, the articles argued that where Bitcoin functions as a means of payment, Bitcoin itself does not have the nature of consumption. Transactions involving Bitcoin itself should therefore not fall within the scope of business tax.

Put simply, if a consumer first acquires Bitcoin with New Taiwan Dollars and subsequently uses that Bitcoin to purchase goods or services, the actual consumption occurs when the consumer acquires those goods or services, rather than when the consumer initially acquires the payment instrument. Treating the acquisition of Bitcoin itself as a separate taxable act of consumption could therefore conflict with the fundamental principle that business tax is imposed on final consumption.

Seven years later, the Ministry of Finance issued Order No. 11504611390 in 2026, confirming that transfers of virtual assets and stablecoins falling within the definitions of the Virtual Asset Services Act are outside the scope of business tax. In substance, the Order reflects the tax law logic that payment instruments and investment instruments used for savings or preservation of value do not themselves have the nature of consumption, and is consistent with the fundamental tax position advanced in the 2019 articles.

This development also demonstrates that although it has taken years for the legal characterization of virtual assets in Taiwan to become more fully developed, the appropriate tax treatment could already be analyzed by returning to the fundamental nature of business tax as a tax on consumption.

IV. NFTs Remain Subject to Business Tax

The Ministry of Finance Order does not mean that all blockchain-related or virtual-asset-related transactions are outside the scope of business tax.

First, NFTs (Non-Fungible Tokens) are not covered by the treatment under the latest Order.

Article 3 of the Virtual Asset Services Act, in defining “virtual assets,” expressly excludes non-fungible tokens representing values that are non-substitutable. NFTs are generally used to represent specific and non-substitutable digital assets or goods, such as particular works of art, collectibles, or real estate. Transactions involving such assets are different in nature from the mere transfer of a payment instrument and may themselves have the nature of consumption.

Accordingly, where a business entity sells NFTs, or uses NFTs in exchange for goods or services, the transaction remains subject to business tax in accordance with applicable law.

V. Transaction Fees Charged by Exchanges and Virtual Asset Service Providers Remain Subject to Business Tax

Another important practical distinction is that a transaction involving the “virtual asset itself” is not the same as the “provision of virtual asset transaction services.” Service fees or transaction fees charged by virtual asset service providers for providing virtual asset exchange or other related services constitute consideration received for the provision of services. Such fees therefore remain subject to business tax.

For example, where a trading platform facilitates a user’s purchase or sale of Bitcoin, and the Bitcoin involved falls within the definition of a virtual asset under the Virtual Asset Services Act, the sale of the virtual asset itself is outside the scope of business tax. However, transaction fees charged by the platform for providing its trading services constitute revenue from the sale of services and do not fall outside the scope of business tax merely because the underlying transaction involves virtual assets.

Virtual asset businesses must therefore distinguish, for accounting and tax purposes, between transactions involving the virtual assets themselves and revenue derived from providing trading, exchange, or other related services.

VI. Not Being Subject to Business Tax Does Not Mean That Virtual Asset Transactions Are Entirely Tax-Free

Finally, it is important to emphasize that the Ministry of Finance Order concerns the treatment of virtual assets under Taiwan’s “business tax.” It does not provide a general exemption from taxation for virtual asset transactions.

Business tax and income tax are separate tax regimes. Even where the transfer of a virtual asset itself falls outside the scope of business tax, whether income generated from the purchase and sale of virtual assets constitutes taxable income must still be determined separately under the Income Tax Act and in light of the circumstances of the particular transaction. Accordingly, the statement that “virtual asset transactions are not subject to business tax” should not be understood to mean that “no tax is payable on virtual asset transactions.”

Conclusion

The Ministry of Finance Order No. 11504611390, issued on September 3, 2026, formally clarifies a long-standing question concerning the business tax treatment of virtual asset transactions in Taiwan.

The core principle is relatively straightforward. Business tax is fundamentally imposed on consumption. Virtual assets such as Bitcoin and Ether, as well as stablecoins, that perform payment or investment functions do not themselves have the nature of consumption. Their transfer should therefore not constitute a transaction subject to business tax.

There are, however, clear limits to this principle. NFTs may themselves represent particular goods or assets, while service fees and transaction fees charged by virtual asset service providers constitute consideration for the provision of services. These transactions therefore remain subject to business tax. In addition, income generated from virtual asset transactions may still be subject to income tax and is not exempted by the Ministry of Finance’s latest interpretation.

For businesses engaged in virtual asset transactions or providing virtual asset-related services, the important point is therefore not simply to understand the latest Order as making “virtual assets tax-free.” Rather, businesses should distinguish between the subject matter of each transaction and the nature of the revenue received in order to determine the proper tax treatment.

Related Materials:

• Ministry of Finance Order No. 11504611390, dated September 3, 2026
• Ministry of Finance, “Sales of Virtual Assets and Stablecoins Specified in the Virtual Asset Services Act by Business Entities Not Subject to Business Tax”
• Central News Agency, “Ministry of Finance Issues New Business Tax Order for Virtual Currencies: Certain Virtual Asset Transactions Not Taxed, While NFTs and Service Fees Remain Taxable”
• Cheng-Yu (Paul) Ma, “Business Tax Issues in Bitcoin Transactions (Part I),” Root Law Journal, Vol. 35, No. 4 (2019)
• Cheng-Yu (Paul) Ma, “Business Tax Issues in Bitcoin Transactions (Part II),” Root Law Journal, Vol. 35, No. 5 (2019)
  

Legal Disclaimer

This article is provided solely for general informational purposes and is intended to help readers understand basic legal concepts under Taiwanese law. It does not constitute legal advice, legal opinions regarding any specific case, or create an attorney-client relationship between the reader and the author or this law firm.Every legal matter is unique. The applicable law, available evidence, procedural posture, and factual circumstances may differ significantly from one case to another. Even where similar legal issues arise, the appropriate legal analysis and strategy may vary depending on the specific facts. Accordingly, if you are involved in a legal dispute or require legal advice regarding a particular matter, you should consult a qualified attorney to obtain advice tailored to your individual circumstances.In addition, statutes, regulations, judicial decisions, and legal practice may change over time. This article reflects Taiwanese law and prevailing legal practice as of the date of publication (or the most recent update). Subsequent legislative amendments or developments in judicial practice may affect the accuracy or continuing applicability of the information contained herein. Readers are therefore encouraged to consult the latest legal authorities or seek professional legal advice before relying on this article.