Japan is amongst the nation who have accepted cryptocurrencies and is strictly looking into the regulations by them. A part of these regulations is to establish a system that will prevent people from evading taxes on their cryptocurrency earnings. Notably, the government might be implying taxes on the digital assets be 2020.
According to a survey by the National Tax Agency [NTA], over 300 individuals declared that they have earned at least 100 million yen, majorly from cryptocurrency trade in 2017. Looking into the margin of profits the government feels the need to put a proper taxation policy in place.
A report by the Mainichi.jp, states that regulations will enable NTA o demand information from transaction mediation businesses on customers. These customers will be the ones who are suspected to have evaded taxes on their cryptocurrencies earnings. This tax reform will be applied from the next fiscal year.
Until now, the profits earned from cryptocurrencies were reported as miscellaneous income under the Income Tax Act. Once this system is introduced, they will be declared as income. The evaders will have to face stringent measures from the NTA, as the report suggests that with the growth of crypto trading in the country, the cases of tax evasion are also on the rise.
Currently, NTA could only ask virtual currency trading and other businesses to provide information of their customers voluntarily. However, after the reform, NTA will be able to demand other information as well including the customers’ names, addresses, and even their 12-digit identification numbers.
The reform also notes that adhering to personal information protection, the NTA could only ask those details for those who are suspected to have earned at least 10 million yen from crypto transactions. The NTA would also have the power to demand banking information opened under false names used for tax evasion.
According to the publication, the ruling coalition is aiming to formally introduce the system after the fiscal, starting in April 2020.
Read more: US, UK And Japan Looking To Update Tax Guidelines To Involve Cryptocurrencies
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