This has prompted some cryptocurrency-related online content creators on the mainland to point out that taxing such transactions shows that authorities are starting to recognize the legitimacy of cryptocurrencies. The Shanghai Tax Department subsequently deleted the explanation on Sunday from its public WeChat account.
However, mainland legal experts pointed out that the Shanghai tax service’s explanation does not indicate any potential change in the country’s cryptocurrency policy.
The explanation had indicated that individuals who obtain virtual currencies from other players through online transactions and generate revenue by selling them at a higher price must pay income tax on these profits. The Shanghai Tax Agency article detailed taxes in four scenarios, including loans taken out by individual investors from their investee companies and online cash gifts.
A Chinese economist calls for a review of the strict ban on cryptocurrencies amid slow adoption of the Chinese electronic yuan
A Chinese economist calls for a review of the strict ban on cryptocurrencies amid slow adoption of the Chinese electronic yuan
While there is no official signal from Beijing about changing its stance on cryptocurrencies, local cryptocurrency circles expect increased regulatory oversight over taxation of income linked to virtual assets on the mainland.
China has rejected the legal tender status of cryptocurrencies, but has not opposed their attribution as property or commodity, according to an article published by Jin Jianzhi of Shanghai Mancon law firm on Friday. The government can impose taxes on relevant transactions under the law, the lawyer said.