Topic: [2018-02-10] Japanese Crypto Investors To Pay Tax Of Up To 55 Percent On Profits - page 2. (Read 376 times)

If government services were so amazing, people would pay without being physically threatened. It's a protection racket.

I never said it's normal. I too find tax rates of 55% to be ridiculously high. The thing with the government is that they don't care how hard you work, or how much risk you expose yourself to, they just want you to pay your due taxes as a brave citizen. Believe me, I consider these tax rates to be a legal form of theft from the side of the government, but people don't let it distract themselves. If you look at how the general trading volumes in Japan have been increasing, it doesn't show any sings of traders being demotivated. Wherever you are from, what are the tax rates that apply to you when it comes to your profits?

You have your own opinion,and you think 55% tax is something normal,but for me it is not in any case-no matter what the profit is.If you work hard and invest your time and money,you take a big risk also,then after all that you think to give away 55% of your profit is make sense?

Such a high tax rate can only be demotivating factor for most investors,but there are also some of them who will think like you.But this is only for big players,let them worry about it-if they are OK with 55% tax it does not mean anything to me in life.

See, if you come to think of it, the Japanese government has been quick to respond about the global issue concerning Bitcoin. In fact, by now, they are trying to make money out of it. They see business in it in the form of taxation, tourism & development, in the first place. I see it as a very smart move because then they have looked at the bigger picture rather than just do what like the rest did -- ban it. You see, not only they are tagged as accepting and open-minded in terms of development but also do they make bigger money economically within its control. Otherwise stated, they would rather accept something that is quite impossible to ban totally and at the same time make money out of it rather than banning it and have its people do a workaround over its stiffer regulation.

I think you shouldn't underestimate the amount of cryptocurrency millionaires that are actively trading. So for them it's easier to net $367,000 in profits annually since their initial investment capacity is a lot bigger. Of course this will target the people who are already rich but u think 55% is a little too much.

The U.S. can be just about as bad.

39.6% Federal tax on short term gains
12.3% California tax on short term gains
0.9% Medicare Tax

= 52.8%

Government wouldn't miss the opportunity of getting their share of the profits through tax. 55% tax may be too high but then if you are paying this percentage then it would mean you are earning way higher so if you look at it the positive way then you are a profitable trader which many are only wishing to achieve. We should not try to avoid paying taxes because it is the blood of the government and we are also the one who would benefit from it if the taxes are use correctly. I would be willing to pay tax as long as I have those profits because after all profit is still a profit no matter how big or small it is.

You act like investors are losing big time if they happen to invest in crypto, which isn't the case at all. Sure, 55% as being the highest tax category is very steep, but it won't prevent or demotivate investors from trading and investing in the crypto world. If you end up making that much in profits to fit in the 55% category, you are making a lot profit already, even after the tax deduction. If you make $1 million in profit, it means that you have a net profit of $450k, which is still a fantastic achievement. By your logic it would mean that investors will also miss out on that $450k if they didn't invest, because you think it doesn't make sense. Profit = profit.

Also if you trade the altcoins against the bitcoin, and do not cash out in fiat, how do you charge capital gains?

In some countries, people get a tax exemption up to a specific amount.. before the tax kicks in. So you have to subtract your

exemption from your total trading profit, before you work out the total tax levied on that. For example : You only pay capital

gain taxes on the amount after your profit exceed say $10,000. {This is done to cultivate a investment and saving culture

amongst tax payers.} If you tax the whole amount from the start, people will not be incentivised to invest or save some of

their money. Governments also use taxes to punish certain actions {tax on cigarettes & liquor} ..... if they want to punish

Crypto investments.. they would simply tax it to death. 

How will they track the profits? Someone is trading, someone is just getting paid with cryptocurrency, someone is using them to pay services or products etc...

It's a bit unclear the way this article is saying it, so this quote from a Bloomberg article should be clearing it up;

In other words, anyone who gains a minimum of 40 million JPY will be subject to a 55% haircut. It's quite harsh to be honest, but if that's the law there, then it's the law. Good thing is that it won't affect the majority of the people there. Professional parties and wealthy individuals are the ones who will be 'affected'. Good thing is that this (if the law doesn't treat spending on goods the same as lust liquidating profits on-exchange) might turn out into something that will give people more incentive to spend their coins. As per my own jurisdiction, I am allowed to do this in order to avoid paying tax. It was even somewhat 'advertised' (explained may be a better term) on TV as being a way to prevent yourself from paying tax over your crypto holdings/profits.

Given the opportunities provided in the world of cryptocurrency,no country will not be so easy to give up collecting taxes on crypto trading&investment.But 55% is too much regardless of how much profit it is,I do not see any sense for big investors to work with crypto and give more then half of the profit to tax.If this is true then Japan will not be so friendly country for investors compared to some other countries.

But as many already know,it would be almost impossible to not pay tax when it comes to BTC-governments slowly tightens maneuvering space for crypto users,it is only matter of time when they will connect all the dots.

That will completely depend on the country you live in, but in the US and UK at least spending rather than selling is no loophole. You're still liable for the same taxes as a straightforward sale. It's still classed as a disposal.

The US were planning on exempting expenditure up to $600 in value. I don't know how far that got.

So, as cryptocurrencies become legalized in many countries, user start finding out how many taxes they have to pay when they sell their coins, but this leads to a question - can you legally avoid those taxes if instead of selling coins for a profit you just use them as a currency? If yes, then it can become a big boost for crypto adoption, until governments will close this potential loophole.

So who's paying the 55%? I can't find any mention of that.

I feel for the people who got caught up in the Coincheck hack. They're being paid back in JPY which means an involuntary tax bill. I would not be best pleased about that.

The size of taxes, of course, is impressive. However, it should be borne in mind that with small profits and tax deductions will be small. A little more than half of the profits are taken as taxes only if the profit is more than 367,000 dollars. I do not even know who can have such a big profit.

Japanese cryptocurrency investors will pay between 15 and 55 percent on their profits declared on their annual tax filings this year, Bloomberg reports Thursday, Feb. 8.

The Japanese National Tax Agency had already ruled “last year” that capital gains on transactions of virtual currency are considered “miscellaneous income,” Bloomberg writes.

The tax on cryptocurrency profits is higher than the around 20 percent tax levied on profits from stocks and foreign currencies, with the higher percentage tax applying to those who earn more than 40 mln yen a year (about $367,600).

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 a large revenue from taxing crypto.
Bloomberg reports that the Japanese National Tax Agency is creating a database of cryptocurrency investors, potentially to ensure enforcement of the tax laws, as well as retaining teams in Tokyo and Osaka to watch electronic trading.

The US Internal Revenue Service (IRS) also reported today that they have created a 10 person team of investigators aimed at tracking down crypto users that failed to report their profits in their tax declarations.

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.

https://cointelegraph.com/news/japanese-crypto-investors-to-pay-tax-of-up-to-55-percent-on-profits