Japan’s NTA Tax Agency Declares All Crypto Investors Earning $1,800+ Must Report
New Tax Laws in Japan Will Require Any Investor that Earns Over $1,800 in Crypto to Pay Taxes
With all the profit that consumers stand to make with cryptocurrency nowadays, it should come as no surprise that taxation has been newly introduced. The Japanese NTA, a tax agency, issued a policy that would require both companies and individuals to declare any profit they earned through crypto on income taxes, if they exceed $1,800. This policy was put into effect on July 15th.
The Japanese NTA, along with the Financial Service Agency and other companies that deal with cryptocurrency, believes in an effort that includes a simplified tax declaration. This method would help to evaluate the profits that consumers stand to make with virtual currencies. The main issues brought up with determining the profit is the fact that there’s different ways that each platform store the transaction history of consumers. The NTA brought up their concern on dealing with consumers that cheat on their taxes, which is only made worse by the lack of consistent history.
In April, there was a collaborative study session with the NTA, the FSA, and Japan Blockchain Association, providing an opportunity for each entity to discuss their opinions on these tax protocols. There are others planned through 2018, though the goal is to establish a tax policy before the next year of returns are filed.
The NTA requested that private companies use a software they have developed, which will automatically describe the way that the user has both lost and gained funds. The software has improved the process of figuring out the correct tax payment, though it has previously been used on the income made for IT companies before now.
When consumers have to claim profits that come from crypto sales, it will be categorized as miscellaneous income, and will need to be filed for either an individual or company. The software proposed by NTA is still in the works, though it seems to be the only way that taxpayers will be able to cohesively calculate their tax payments. For individuals who prefer physical tax documentation, the NTA is working to develop tax declaration paperwork that meets the new demands.