China

China treats cryptocurrencies as virtual digital assets, explicitly stating they have no legal tender status. Holding and trading cryptocurrency, as well as engaging in virtual currency business activities, are explicitly illegal under Chinese law. This comprehensive ban, reaffirmed and extended by a Joint Notice from eight government agencies in February 2026, means there are no licensed domestic trading platforms or crypto-related businesses within China. The State Administration of Taxation governs tax administration in China. While crypto activities are domestically prohibited, the existing Common Reporting Standard (CRS) framework, implemented since September 2018, forms the basis for international tax information exchange. Due to the domestic ban, there is no formal tax framework for individual income, capital gains, or other crypto-related income within China. Individuals engaging in these activities domestically face legal liability rather than taxation. Similarly, a 25% corporate income tax rate applies to legal entities in China, but no crypto businesses are licensed domestically, making this rate inapplicable to crypto-specific corporate entities. VAT does not apply to crypto transactions, as they are prohibited. However, for Chinese residents, overseas crypto transactions are subject to increasing scrutiny. Gains from converting crypto to fiat or swapping one crypto for another overseas may be classified as "property transfer income" and pursued for personal income tax by Chinese authorities, particularly for transactions between 2022 and 2024, utilizing data obtained through the CRS. No holding period benefits apply. Staking, mining, DeFi activities, and NFTs are all prohibited under Chinese law as part of the comprehensive ban on virtual currency business activities and tokenization. Consequently, these activities do not have a domestic tax framework. As noted, overseas crypto-to-fiat and crypto-to-crypto transactions are taxable under the CRS for Chinese residents. Recent developments include February 2026 regulations that strengthened stablecoin restrictions, banning unauthorized issuance of yuan-pegged stablecoins and imposing strict oversight on real-world asset tokenization. Hong Kong is consulting on the OECD Crypto-Asset Reporting Framework (CARF) and CRS amendments, with planned data collection starting in 2027 and full implementation in 2028. While mainland China is not currently on the initial CARF implementation list, its existing CRS infrastructure positions it for potential future participation, which could further intensify reporting obligations for overseas crypto activities.