The rise of Bitcoin in Japan
Japan, the rising land has awaken in the crypto currency world!!!
While carrying out regular research on the crypto currencies and Bitcoin,KryptoMoney.com, recently learned that Japan has officially recognized Bitcoin as a mode of payment. The news came on April 1st, 2017 when most of the countries witness change of financial year.
Along with recognizing Bitcoin as a mode of payment, it also made it cleared that no more Consumption Tax would be levied and collected on Sale of Bitcoin, which means Sale/Purchase of Bitcoin is exempted from Consumption Tax.
What is Consumption Tax?
The consumption tax is a form of indirect tax that is levied on spending on goods and services.Consumption Tax can be understood by comparing it to Sales tax or GST( Goods & Service Tax) or VAT (Value Added Tax). At present the Consumption Tax in Japan is 8 perecent on almost all the items.
Untill now, when Bitcoin was officially not recognized as a mode of payment and tax policies related to it were not issued, the crypto currencies along with Bitcoin was not in the category of exempted items and as a result buying and selling of these digital crypto currencies were treated to be taxable and tax was levied on carrying out of these transactions.
But now, Japan has issued the tax bill related to Bitcoin and digital currencies,and from now on, no Consumption Tax will be levied on Sale/Purchase of it.
Tax Trearment: Final Conclusion
Making Bitcoin and crypto currencies exempt from Consumption Tax does not mean it won’t attract any tax treatment. Like in most countires, if Bitcoin is sold/purchased on a regular basis with a sole intention of earning profits from trading activities, the income arising would be treated as Business Income.
If Bitcoin are purchased with an intention of making investments and sold on a later date by booking profits, the income arising would be treated as Income from Capital Gains.
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