China -- Cryptocurrency Tax Framework Regulatory Overview

China classifies cryptocurrency as a virtual commodity, not legal tender, and despite a nationwide ban on crypto trading and mining since 2021, profits from crypto activities remain taxable for individuals and businesses.[1][2][3]

Capital Gains Tax Rates

• Individuals face a flat 20% capital gains tax (CGT) on profits from selling, trading, or exchanging crypto (including crypto-to-crypto trades, NFTs, and DeFi activities), calculated as the difference between sale price and acquisition cost in RMB using official exchange rates; this applies regardless of holding period and treats crypto under "property transfer income."[1][2][3]
• Buying crypto with fiat is not taxed, but realizing profits triggers the 20% CGT.[1][2]
• Businesses pay 25% corporate income tax on crypto-related gains.[1][2]

Income Tax on Crypto

• Crypto earned as income (e.g., mining rewards—though mining is banned—staking, airdrops, salary, payments for services, lending, yield farming, or NFT creation/royalties) is taxed at individual progressive rates from 3% to 45% based on total annual earnings; general thresholds (e.g., 5,000 CNY monthly) may reduce liability.[1][2]
• Companies pay 25% corporate income tax on such earnings.[1][2]
• Offshore crypto holdings are taxable for Chinese tax residents on a worldwide income basis, with no exemption for foreign platforms.[3]

VAT/GST Treatment

• VAT is not applied to individual crypto trades.[1][2]
• Businesses providing crypto-related services may face VAT.[1][2]

Reporting Requirements

Search results do not specify detailed reporting obligations for individuals or businesses, but China's strict enforcement on undeclared offshore income implies global income must be reported; general tax residents are liable once income is realized.[3] No crypto-specific exemptions or thresholds beyond standard income rules are noted.[1][2]

Crypto-Specific Tax Legislation

No dedicated crypto tax law exists; taxation falls under general income tax and property transfer rules, with crypto treated as virtual commodities.[1][2][3] The 2021 ban criminalizes transactions/mining, potentially leading to penalties over taxes, though gains are still pursued by authorities.[5]

Note on conflicts and limitations: Sources [1][2][3] consistently describe taxation despite the ban, while [5] claims no official policy due to illegality—authoritative consensus favors taxing realized gains.[1][2][3] Information is based on secondary reports up to 2025; official State Taxation Administration guidance is absent here. For primary references:

• State Taxation Administration (China's tax authority): No direct URLs in results, but general rules stem from PRC Individual Income Tax Law (available via sta.gov.cn).