Since cryptocurrency is going mainstream in the global economy, investors in Malaysia are becoming more interested in digital assets such as Solana (SOL). Solana has one of the fastest networks, scalability, and cheap transaction costs, making it one of the most demanded altcoins. However, before venturing into the market, it is important to know the legal and tax effects the solana price malaysia. This paper examines the prevailing regulatory environment and tax obligations you should be aware of.
Purchase Solana in Malaysia?
Indeed, it is legal to purchase Solana in Malaysia. The purchase, sale, and possession of cryptocurrencies have not been prohibited by the government. Nevertheless, non-legal tender digital assets such as Solana do not exist. It implies that you cannot buy goods and services using Solana as you can with Malaysian Ringgit (MYR). The Securities Commission Malaysia (SC) is the regulator of crypto activities in Malaysia. In 2019, the SC came up with the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 that provides unambiguous definitions of digital assets as securities under some conditions. Therefore, it is possible to operate legally only registered Digital Asset Exchanges (DAXs) in the country.
Using International Exchanges such as Bitget?
Bitget is not registered locally as a DAX with the Securities Commission, but it can be accessed in Malaysia by Malaysian users and does not conflict with the local laws when used to invest personally. The Solana can be purchased, traded, or staked by many Malaysians through international exchanges such as Bitget. Nevertheless, one should make use of those platforms that comply with KYC (Know Your Customer) and AML (Anti-Money Laundering) rules. Bitget adheres to such standards as identity verification to ensure a safe trading environment. As an additional precaution, the user must be conscious that he or she is trading responsibly and must only use websites that provide 2FA (Two-Factor Authentication) and cold storage wallets.
Solana taxation in Malaysia
The cryptocurrency tax regime in Malaysia is not regulated by a crypto tax law. Rather, it is within the general taxation principles as described by the Inland Revenue Board of Malaysia. This is what you need to know about the way your Solana-related activity may be taxed.
Capital gains tax
To this date, Malaysians do not pay capital gains tax. This implies that if you are long-term investing in Solana and subsequently sell it and make a profit, you may not be taxed. This is, however, the case where you only do transactions occasionally and not as a regular business activity.
Business income tax
In case you trade Solana regularly or as a profession, your transactions can be treated as business income, and your gains will be subject to business taxation. Factors that LHDN can take into consideration are:
- Quantity and number of transactions.
- Holding period.
- Applying technical expertise or equipment.
- Trading services marketing or advertising.
Provided that your Solana trading is business-like, you will have to report your income, and you might also have to submit a business tax return.
Staking and Airdrops
In case you received the SOL tokens as a reward, an airdrop, or as part of some promotion, they will be regarded as income and might be taxed at the moment of receiving. It is advisable to maintain a record of the amount received, the market value at the time, and the source of the tokens.
Reporting Your Cryptocurrency
Although in Malaysia you are not required to report your cryptocurrency holdings unless you are conducting business, it is a good practice to:
- Keep a close record of transactions.
- Keep receipts or confirmations of such transactions as Bitget.
- Store staking rewards and trading history.
This will keep you on the right side in case it comes calling or in case the legal system tightens up in the future.
Crypto Regulations in Malaysia: Changes
The regulatory system of digital assets in Malaysia is developing. The SC has become more interested in licensing and control of platforms that provide initial coin offerings (ICOs) and crypto services. Although the existing regulations are rather loose, in the next few years, it is probable that more rigid rules and tax transparency will become a reality.
Conclusion
In Malaysia, the act of purchasing Solana and holding it is not illegal and is not mostly taxed, particularly on a passive and individual level. Nevertheless, when you are actively trading or receiving income on crypto-related services, you should be ready to pay taxes according to the business income requirements. Malaysians can easily access Solana through some platforms such as Bitget, although the users are advised to be cautious, adopt safe trading practices, and be aware of the changing laws regarding the matter.
