- Introduction
On October 15, 2025, Chinese-language music superstar Jay Chou posted two messages on Instagram calling out Taiwan’s well-known magician Cai Weize, accusing him of losing contact and warning, “If you don’t show up again, you’re finished.” He then unfollowed Cai Weize, sparking trending searches. According to public reports, Jay Chou entrusted a magician friend several years ago with 100 million New Taiwan Dollars (about 23 million RMB) to buy and manage Bitcoin. Now, that friend has gone missing, and the assets are unaccounted for. Both individuals involved are Taiwanese and subject to Taiwan’s tax laws. Jay Chou’s act of having his friend hold Bitcoin on his behalf is unrelated to tax evasion; it was likely due to the complexity of the crypto space and trust, rather than any illicit intent.
This incident highlights the common practice of asset custody on behalf of others—known as “nominee holding”—which is prevalent in crypto investments. Such arrangements often carry systemic tax and regulatory risks due to complex ownership structures and multiple tax jurisdictions. Using Jay Chou’s case as an example, this article focuses on Taiwan’s crypto tax policies and recent developments, providing a comprehensive overview of nominee holding behaviors in Taiwan’s crypto landscape and offering insights for investors.
- Taiwan’s Crypto Tax Policies and Recent Developments
2.1 Overview of Taiwan’s Crypto Tax System
Currently, Taiwan has established a preliminary but somewhat vague framework for taxing crypto assets. On one hand, Taiwan has not explicitly legislated the classification of cryptocurrencies. According to the Financial Supervisory Commission (FSC) in 2019 (Order No. Jin Guan Zheng Fa Zi 1080321164) and a joint statement with the Central Bank in December 2024, Taiwan considers Bitcoin and other virtual currencies as virtual commodities rather than legal tender. They are deemed highly speculative and not recognized as currency, with no legal tender status, and their value is highly volatile. In terms of classification, Taiwan distinguishes between crypto assets with securities attributes and those without.
On the other hand, Taiwan lacks specific tax regulations for crypto assets, relying instead on existing tax laws. Unlike the U.S. or Germany, which tax crypto gains as capital gains, Taiwan taxes individual and corporate crypto trading profits as income tax. This approach is similar to Japan and India, where crypto income is treated as ordinary income.
2.2 Overview of Crypto Regulation in Taiwan
Taiwan’s crypto regulatory policies have evolved over the past two to three years, aligning more closely with international standards while also seeking innovation. Starting in 2021, the FSC and Taiwan’s financial authorities issued a series of guidelines indicating a shift from “no regulation” to “limited regulation.” That year, the FSC included virtual currency platforms under anti-money laundering (AML) regulations, requiring transaction monitoring and reporting—laying the groundwork for future tax enforcement.
In 2022, Taiwan’s tax authorities announced plans to strengthen scrutiny of high-net-worth individuals’ crypto transactions to combat tax evasion. In September 2023, the FSC issued the “Guidelines for Managing Virtual Asset Platforms and Trading Businesses” (VASP), regulating the conduct of crypto service providers based on AML laws.
Between 2024 and 2025, Taiwan has made further progress. The FSC announced that the “Virtual Asset Service Law” would be submitted to the Legislative Yuan by June 2025, with legislative procedures underway. On January 13, 2025, Taiwan’s Ministry of Finance submitted a written report (Letter No. 11304672340) to the Legislative Yuan’s Finance Committee, clarifying the crypto taxation framework. In July, the Legislative Yuan’s Legislative Bureau published a research report on crypto tax regulation, noting that while Taiwan has moved from a wait-and-see stance to actual taxation, clear legislation and enforcement details are still lacking. It recommended drafting dedicated crypto tax laws or regulations.
Overall, recent policy trends show Taiwan’s efforts to standardize crypto tax policies both legislatively and administratively, aiming to create a fairer and more transparent market environment for crypto industry development.
- Tax and Regulatory Risks of Nominee Holding in Taiwan
Returning to Jay Chou’s case, the dispute over Bitcoin nominee holding between him and his friend appears to be a simple civil contractual matter. However, it reveals deeper issues regarding the recognition and compliance risks faced by crypto assets under Taiwan’s traditional tax framework. Under current Taiwanese law, nominee arrangements can trigger multiple taxes—such as income tax and gift tax—and may be scrutinized through the “substance over form” principle, which allows tax authorities to pierce through legal titles to the actual economic benefits.
As Taiwan advances legislation like the Virtual Asset Service Law, transparency requirements for crypto transactions will increase, posing significant challenges to traditional nominee holding methods. To analyze the tax and regulatory risks involved, we must examine how Taiwan’s laws classify such arrangements, how taxes are calculated, and what supervisory issues may arise.
3.1 Relevant Taxes and Legal Basis
3.1.1 Income Tax
According to the written report (Letter No. 11304672340), gains from non-securities virtual currencies like Bitcoin and Ethereum are classified as “property transaction income.” Therefore, any profit realized from selling crypto assets—regardless of how the funds are eventually used—must be subject to income tax. The most significant and certain tax liability occurs at the point of sale when profits are realized.
Under Taiwan’s Income Tax Act, Article 14, Paragraph 1, Item 7, the calculation for nominee holding income is: taxable income = total sale proceeds – original acquisition cost – necessary expenses. For large gains approaching NT$200 million, a 40% top tax rate applies, so the tax payable is approximately 40% of the taxable income.
From a tax responsibility perspective, if the nominee holds the assets in name but the actual benefits accrue to the principal, the tax obligation may fall on the principal. However, if the nominee disposes of assets without authorization, ambiguity arises regarding who bears the tax.
3.1.2 Gift Tax
Nominee arrangements often involve fund transfers. Without clear evidence that these transfers are “trust investments,” authorities may assume they are gratuitous gifts. According to Taiwan’s Inheritance and Gift Tax Act, Article 4, Paragraph 2, “a gift is a transfer of property without compensation by the owner to another person, which takes effect upon acceptance.” If there is no detailed trust agreement or transaction records, tax authorities may deem the principal has gifted funds to the nominee, triggering gift tax.
The calculation is based on the total gift amount minus applicable deductions and exemptions, with progressive rates from 10% to 20%. Given the substantial asset size (over NT$50 million), a 20% rate is likely applicable, with the tax formula: tax payable = (total gift amount – tax exemption – deductions) × 20%.
3.2 Risks of Nominee Holding in Taiwan
In recent years, Taiwan’s crypto tax policies have shifted from provisional guidelines toward dedicated legislation. The Legislative Yuan has recommended establishing specific crypto tax laws to address ambiguities—such as loss offsetting, unrealized gains, and cost basis issues. Enforcement is also strengthening, with measures like mandatory reporting and data collection.
The FSC’s ongoing development of the Virtual Asset Service Law aims to establish platform registration and reporting systems, significantly enhancing tax authorities’ ability to monitor transactions. This increases compliance pressure on investors and makes nominee arrangements more susceptible to scrutiny.
Additionally, nominee holding involves complex legal and tax issues. Under Taiwan’s “Taxpayer Rights Protection Act,” the actual taxpayer is the one who derives the income. If the assets are registered in the nominee’s name but the beneficial owner’s contributions, earnings, and disposal rights belong to the principal, authorities may recognize the principal as the true taxpayer and require them to fulfill tax obligations.
In Jay Chou’s case, if the nominee relationship cannot be substantiated, tax authorities might target the nominee holder, risking asset loss for the principal. Therefore, investors engaging in nominee arrangements should proactively declare crypto gains, maintain comprehensive transaction records, and formalize agreements clarifying rights, obligations, and tax responsibilities.
- Conclusion
Jay Chou’s case is not an isolated incident but a reflection of the systemic risks associated with crypto nominee holding in Taiwan. While the crypto world emphasizes decentralization and anonymity, tax compliance remains centralized and personal. Both celebrities and ordinary investors face potential legal and tax pitfalls, making risk management a long-term concern.
