Japan Working on Ways to Simplify Tax Filing System for Cryptos | Crypto
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Cryptocurrency trading steadily forms a new relevant multi-million industry that generates a large source of revenue for companies and private investors engaged into this risky endeavor.
However, despite the wide-world adoption of digital assets, only a few countries so far have devised a deliberate regulatory framework, which fully covers all of legal aspects occur during cryptocurrency-related activities.
Coinspeaker repeatedly reported many European and Asian countries where cryptocurrency trading is especially popular to start amend their taxation to reap benefits from enormous income pumped out of the industry.
Today tax authorities have to resolve two task simultaneously. First, they are to set an effective tax system that will benefit a government budget and secondly the system is expected to be crypto-friendly and potentially to boost the blockchain activity in the region.
Each county is pursuing their goals differently. While Thailand abundant in cryptos has been chasing investors with a new set of regulations ultimately slowing down the pace of crypto-development, France is looking forward to host crypto-related businesses easing up the tax rate on cryptocurrency sales from 45 to 19 percent.
Japanese Attempts to Facilitate Crypto Taxation
On the other hand, Japan famed for being one of the leading counties in terms of blockchain-based patents filed by Japanese residents, still did not elaborate a single system for crypto-taxation.
Nonetheless it became known that Japan’s Tax Commission is looking for ways to simplify the current tax filing system for cryptocurrencies in order to ensure investors accurately report their gains.
The commision is reportedly planning to implement an improved system that would standardized the tax filing process and make it easier for taxpayers to calculate their profits on the sales of digital assets against both fiat currencies and other cryptocurrencies.
A Change of Crypto Taxation Form
Today Japanese entities involved into crypto-sphere have to undergo a cumbersome process of tax filing since there is a lack of unified classification of the income reported from cryptocurrency trading.
Currently, profits from the sale of cryptocurrencies in Japan fall under “miscellaneous income.” A sliding tax rate from 15 to 55 percent is applied, depending on the actual amount of gains above a threshold of 200,000 yen per year, or about $1,800.
Now the commission is considering a shift of from its current form of crypto taxation to that of “separate declared taxation,” although Japan’s deputy prime minister was cautious about making such a change earlier this year.
He believes that the general public would have difficulties with understanding of such a change. He cited the “international nature” of cryptocurrency as one reason why Japanese residents might dislike a change in tax classification. The finance minister also said he was unsure about the “tax fairness” of implementing such a change.
Therefore it remains an open question whether Japan’s deputy prime minister has changed his mind or the tax commission has meant something else to facilitate current system.