As per Bloomberg reports on Thursday, Feb.8, the Japanese crypto investors will be taxed between 15 and 55 percent on their profits declared on their annual tax filings this year.
Having ruled “last year” The Japanese National Tax Agency has levied tax on the crypto traders and said that capital gains on these transactions are a form of “miscellaneous income,” investors are now required to declare their profits in annual tax filings due Feb. 16-March 15.
In comparison, South Korea had announced in Jan. that crypto exchanges will be taxed 24.2 percent, in line with the existing tax policy for corporations.
According to Bloomberg, around 40 percent of Bitcoin (BTC) trading recently has been against the yen, meaning the country will receive large revenue from taxing crypto.
With no capital gains tax on long-term investments in virtual money in some jurisdictions including Singapore, a handful of Cryptocurrency-rich investors have already left Japan, said Kengo Maekawa, chief executive of Shiodome Partners Tax Corp. Maekawa said his firm has had an influx of clients, most of them in their 30s and 40s, seeking tax advice on virtual-currency income.
“In the meantime, the Japanese national tax agency is creating a data base on Cryptocurrency investors and teams based in Tokyo and Osaka are maintaining a close watch on electronic trading.” Reported Bloomberg.
Positive aspect– Japan had recognized Bitcoin as a legal method of payment back in April 2017, a step towards helping the government prevent unregulated exchanges from hacks and mismanagement like the Mt. Gox meltdown in 2014.
Negative aspect- Some big holders of digital money have left the country and Profits are taxed more heavily than stock-market winnings.