Japan To Start Taxing Cryptocurrency Investors Who Earn Over $1,800
Japan’s tax Agency known as the NTA has implemented new tax regulations through which all cryptocurrency investors earning more than $1,800 a year from their digital currency investments will be required to declare their taxes.
The new tax regulations are part of joined efforts between the NTA, the Financial Service Agency and other organizations in the cryptocurrency market. The tax regulator will also use software that will automatically calculate the profit made by through the sale of cryptocurrencies and it is also calling on private firms to also start using the software so that they can properly fulfill their tax obligations.
The new tax policy will require any individuals whose profits from trading cryptocurrencies goes higher than $1,800 each year and the policy was implemented on July 15th. However, the NTA’s pursuits will not be as easy especially because different platforms store user transaction information differently making it more difficult to determine profits.
The FSA, NTA, and Japan Blockchain Association have been holding talks since April this year to discuss how to go about introducing protocols for cryptocurrency taxes. The software has so far proven resourceful in determining the right tax payment. However, the three entities are planning to hold more study sessions and discussions through which they will work towards creating a stable tax policy ahead of the tax returns in the coming year.
The NTA plans on solving some of the challenges around taxation in cryptocurrencies by using software that can calculate profits and losses automatically and it also plans on making it publicly available to encourage tax returns on cryptocurrencies. General company employees earning profits in the cryptocurrency industry will be required to file their taxes. The tax and finance authorities believe that the automation of the complex tax calculation process will ease the burden of the taxpayers.
The NTA is also contemplating the use of simplified tax declaration papers to make sure that the tax payment system is more secure. Japan is one of the countries that have been trying to come up with a framework that will help streamline cryptocurrency dealings. Cryptocurrencies have been surrounded by controversy and uncertainty over taxation matters and other regulatory issues.
There have also been a lot of concerns over the use of cryptocurrencies for money laundering, not forgetting that numerous exchanges have so far been hacked leading to huge loses. This has resulted in the call for more stringent measures to eliminate some of the issues.