Topic: [2018-10-23]Japanese Government to Significantly Simplify Crypto Taxation (Read 260 times)

Taxes are often confusing and even more so when crypto is involved so I'm glad some countries are making steps to simplify them, especially when they scare a lot of people off and are the cause of a lot of stress and worry. I personally think they should just be treated like stocks and shares -- as they are in some countries -- and you simply keep a record of how much you purchased them for and how much you sold them for and any taxes are paid on the gains if any -- or none if losses are accrued.


Japan has a population of over 126 million so just 300 people paying taxes on crypto is quite laughable, but at least they probably won't have anything to worry about if or when the tax man comes a callin'. I think a lot of people in most countries will be getting away without paying taxes as well either due to ignorance of the law or the fact that they think they can get away with it because bitcoin is largely an unregulated market and the gov isn't told about your earnings automatically like they usually are by your employer. They'll probably find themselves in trouble at some point, though, especially when they want to spend their crypto profits and that's when the authorities will catch a whiff of you and want to know where all this money came from. It seems a lot of people are genuinely ignorant of the law when it comes to taxes on bitcoin and I've had a lot of discussion on here with people who naively think that no taxes are due at all just because it's bitcoin and a lot of them are probably in for a rude awakening at some point unless they live in a tax haven -- and I don't think the Philippines and Indonesia are tax havens lol.

If you have a loss in your trading then there would be no tax to pay because the tax would be base on your income and since you have no income in a sense, then you have nothing to pay. However, there might still be a need to file the income tax though so that the tax authorities would not hunt you down when they learn that you didn't file.

As for the simplification of taxation, Japan sure is the fastest to advance when it comes to cryptocurrency and I hope that other countries would see Japan as a model for their cryptocurrency legalization and adoption as well in the future.

This is surprising considering so few people in Japan use Bitcoin. I walked around Akiba and Shibuya and found only ONE Bitcoin user in the whole country. This'll be an interesting turn of events.

I can already spend Bitcoin in order to legally avoid paying taxes, and I'm definitely not the only one. It's not for nothing that quite some rich coiners have bought properties and whatnot directly with Bitcoin.

The only thing is that when too many people start doing this to avoid taxation, and the government starts to notice that, they might change their mind and even tax Bitcoins that you spend.

Governments don't care about people, they just want to make sure their income doesn't suffer a blow because of how people are trying to use the law against the government in a legal manner. Enjoy while we still can spend without taxation.

Totally depends on where you live. You might be fine and this won't apply.

In the uk you're not taxed when things just sit there. You're taxed at the moment of disposal. That counts as realising the value you have by transacting. It doesn't have to be fiat, it can be crypto too. Your 1 btc that you paid peanuts for is now worth 5 grand when you buy ethereum. You wouldn't have been able to buy five grands worth of ethereum without your bitcoin gain so they nail you.

In practice I don't think many people bother reporting all their crypto to crypto stuff but in theory they should.

If Bitcoin would not have been considered as an investment, but as a means of payment, maybe we would not have any taxes. But if it is taxed, it is also in the interest of governments to simplify the transfer not only of the citizen. The taxes don't care about good or bad news, there are here each day of the year. You are supposed to report the loss too, to be deductible (from the Income-tax, or another)

Can someone, please, explain how it really works? I thought taxes should be paid only if crypto was exchanged for Yen, USD or other fiat currency, because only then you can call it a profit. But from the quoted text above it looks like even those who just hold crypto must pay taxes in case … In case of what, rising of the crypto they hold in relation to USD? If it is so then I have another question.

If in 2009 someone bought ten 1kg gold bullion bars for $300k, put it in the bank vault, and when in 2011 the price of those ten bars amounted to almost $600k should that person pay taxes on the “gain” then? I mean if the gold bullion bars were still in the bank vault.

If only other countries will follow what Japan has done regarding with taxes on crypto then I believe that even those big earners would voluntarily pay their own taxes.

Correct. Corporations have always had their ways to either find a way to pay the lowest possible rates, or to not be subject to taxations at all due to smart constructions and what not. Bitcoin is the perfect way for people like you and me to basically do the same, but without subjecting ourselves to the legal hassle we otherwise wouldn't be able to succeed with anyway.

I do however have to point out that the major part of the tax evasion that's happening is based on pure ignorance. People legit think that because crypto isn't regulated or mentioned by name in their tax forms, they don't have to pay tax. They also think that because of crypto's "anonymity" they can avoid taxation without anyone noticing.

They don't realize that there is no such a thing as anonymity, especially not when using centralized parties. It also doesn't matter what you sell at a higher price for fiat, taxation is mandatory in all cases.

It will be interesting to see how Japan's stricter regulations this year will affect the number of those who declared their profits.

From what I know Japan is already classified as a developed country and in fact it is one of the top 20 countries in terms of Human Development Index. A country's taxation problem is a little bit tricky, you drop the rates wrong you'll end up with a larger debt you raise the rates and you'll end up raising the prices of basic goods in your country both of which will affect the economy in a bad way.

This I agree some people purposely are avoiding taxes because they see that the rates is somehow unfair and they see their country personally is not growing, they somehow see that paying taxes will only benefit a few people that is why they don't pay the right amount. This could be avoidable if our politicians and government officials are not corrupt and won't accept bribes from this powerful companies, but that is not the case.

Tax is a bit of a contradictory fact in Japan, huh? I understand the US IRS had similar success in reporting & collecting taxes from cryptocurrency holders.

The tax burden is set to continue to rise in developing countries, in no small part to service the rising public debt (but also to support a growing proportion of populations dependent on the welfare state). While powerful corporations and individuals continue to "avoid" taxes, expect regular people to increasingly do the same. Fact.

331 investors is pretty low specially for a country where the cryptocurrency industry is highly monitored where they are handing out licenses for their crypto exchage. It would be impossible that only 331 people paid their taxes in Japan specially for a country who has a lot of investors. Other scenarios I see (which is highly unlikely) is that only 331 people profited from the market and everyone has experienced a loss that is why they didn't report anything . Their next move should probably be about them working together with their licensed exchanges where they need to give their customer's records for transparency, this should help them spot out who is not paying their obligations.

Nope. It's citizens with profits above $365,000 or so.

For that amount of money I'd be doing everything possible to wriggle out of paying. Tax is a fact, it doesn't have to be flat out robbery.

Of course, in order for people to pay income tax on cryptocurrency, the tax should be moderate. Especially, if this tax is paid almost on a voluntary basis. The tax on profits in cryptocurrency in Japan is quite high, but 55 percent, as I recall, is a tax on exchanges, citizens pay a much smaller amount of tax. However, vseravno, many states are now looking at Japan, this country is now practically ahead of all in the implementation of cryptocurrency in the whole state.

So 300 and something people paid taxes on crypto profits of over $1 million in Japan yet no one believes it's that low. How many people had that much to start with and how many would make such a large move back in to yen? Not very many at all.

If they're uptight about tax evasion the first thing they should do is get rid of that insane 55% rate for the highest tier. That's a vast incentive to avoid.

Cryptocurrency isn't as widely acceptable as I'd like as a method of payment. But every time I go online, I see positive news. And that really is a good sign. I don't know much about crypto taxation, but if there are moves on to make it simpler anywhere in the world, it can only be good news.

A full committee of tax experts in Japan which is responsible for giving advice to the government on taxation issues has called for the loosening of the country’s digital currency tax filing process.

The exercise is currently convoluted and a change is needed to improve accuracy and compliance. The committee conducted a meeting last week where the suggestion to change the latest crypto tax filing system was debated.

Read the details in the article of Coinidol dot com, the world blockchain news outlet: https://coinidol.com/japanese-government-to-significantly-simplify-crypto-taxation/