China Tax News, an official Chinese tax newspaper, has called the Chinese government to impose taxes on Cryptocurrencies despite the ongoing nationwide ban on digital assets. However, according to Colin Wu, a Chinese journalist who first hinted at the news, if that scenario materializes, it would give cryptos indirect legalization despite the crackdown.
“China’s tax official newspaper called for a tax on crypto and said that the Exchange ’s taxation scale was very large. But, since the PBOC defines all of the crypto activities as illegal activities, taxation seems to indirectly recognize their legalization,” Wu said in a tweet. The original text published in the newspaper put in context the cryptocurrency market and its trading volume.
The author of the article notes that while the overall tax scale of the crypto exchange industry is considerable, further clarification is needed as to how other related industries are taxed. “At the same time, China should improve the relevant property declaration and registration mechanism and carry out real-name registration and dynamic tracking of users who hold a large amount of virtual currency. Furthermore, in judicial areas such as fines and confiscations, reorganization, mergers and acquisitions, bankruptcy liquidation, etc., it is necessary to clarify the handling of virtual currencies to avoid the loss of national taxes,” China Tax News commented.
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The note on the newspaper seems to be authored by the Loudi Taxation Bureau of the State Tax Administration without specifying the name of who issued that exact opinion on the matter.
In September, the People’s Bank of China (PBoC) stated that all companies offering token issuance, trading, derivatives and order matching for digital assets are prohibited. The central bank argued that it seeks to ‘eliminate’ hype and remove speculation to protect the Chinese population from the crypto market. The ‘Notice on Further Preventing and Disposing of the Risk of Hype in Virtual Currency Trading’ highlighted that staff of overseas crypto exchanges operating in the country, including those who work for customer support departments, will be subject to investigations.
