Japanese National Tax Agency (NTA) Creates New System To Prevent Crypto Tax Evasion

Japanese Government Creates New System To Prevent Crypto Tax Evasion

Tax evasion is a problem in almost all countries in the world. People just don’t like to pay taxes. Everybody wants to be benefited from the government, but when you got to contribute, things can get rough. Crypto investors and holders are no exception and some have found creative ways to evade taxes using this new technology.

However, the government of Japan is now full of it. Starting now, the government is trying to find new ways to get all the tax evaders to stop avoiding their taxes and pay up, especially for people who trade cryptos and get a significant profit without declaring it to the government.

Mainichi Shimbun, a popular daily newspaper of Japan, has recently reported that inside sources familiar with the ministry of finances and the National Tax Agency (NTA) have affirmed that the Japanese government will allow the tax agency to get data from transactions made on regulated crypto exchanges and that the crypto transactions will not be ignored anymore.

Tax evaders from Japan will have to either get smart or get clean as now the NTA will be able to solicit information on request about any user who made over 10 million yen (around $88,000 USD) from crypto transactions within the country.

Current Law Protects The Anonymity Of Clients

This will obviously not be a move that will be very well received by the crypto community and even some of the people who pay their taxes will get angry with the Japanese government because due to the current law that governs exchanges in the country, they legally have the right to refuse giving information to the government.

What this means is that if exchanges want to protect their clients while they commit tax evasion (as many fiat-banks often do), they will have to get dirty too instead of only refusing.

The downside of this is that people will have their privacy denied, which is something that the crypto community really defends. However, you can’t have it all when cryptos are starting to get mainstream and they start to get regulated. Nobody hides from the government, it seems (unless you use Monero).

After the new law is passed, the exchanges will only be granted the right to refuse information if they actually have a very good reason presented to the NTA.

Current Law Protects The Anonymity Of Clients

According to the most recent information issued by the NTA, a survey which was cited by the Japanese newspaper that reported the original story, over 300 people have declared to earn more than 100 million yen in crypto deals in 2017. The number is kind of low, so probably some people were lying, which is part of the reason why the new plan was started.

With plans to stimulate a more thorough report of crypto gains, the NTA wants to be ready when the next bull market happens.

According to official information from the Financial Services Agency (FSA) of Japan, even people offering Initial Coin Offerings (ICOs) will now have to disclose more information to the government.

It is important to notice that crypto taxes on Japan can be high. In some cases, as reported by Finance Magnets recently, people can pay up to 55% of their earnings in tax when they are very rich. It is clear that these super-rich investors are the ones that the government is targeting first. They do not care so much about the small earners but they will surely go after the ones who make a big buck trading cryptos.

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