Tax Agency of Japan (NTA) announced the new strategic policy, which came into force on July 15 and aims to improve conditions for people and companies who on their own initiative want to declare the income with profits from trading the virtual currency.
It is reported that, along with the financial services Agency and organizations associated with the cryptocurrencies, NTA is currently implementing a simplified method of filing that automatically calculates the profit from the sale of virtual currencies and taxes that must be paid.
NTA also urged private companies to use software that can automatically calculate the profit and loss from transactions with digital currencies, and urged them to proper and timely payment of taxes, insisting that now it’s much easier to do.
In April, the NTA held a meeting with FSA and Japan Blockchain Association, the purpose of which was to exchange views and thoughts on the methods of filing tax returns related to the cryptocurrency. After a few more meetings which must be held before the end of 2018, NTA intends to develop a specific tax policy to tax filing next year.
Most of the problems related to the calculation of the profit obtained after the sale of crypto-currencies, due to the difference in methods used by each cryptocurrency exchange to store transaction history. NTA also indicated the difficulties associated with deliberately distorted tax returns.
NTA intends to solve these problems by implementing software that can automatically calculate the profit and loss and launch this service which is mainly designed for IT-companies that pay taxes on income from operations with cryptocurrencies.
The profit obtained after the sale of the cryptocurrency, will fall into the category of «other income». The tax return must be filed by those who in the period from January to December this year will receive a profit of more than 200 thousand yen ($1 800). The burden of cryptocurrency taxpayers will be weakened only if the complex calculation will be automated. NTA is also considering simplifying the paperwork associated with tax returns.
The issue of taxation of cryptocurrencies in Japan, rises not for the first time. In June of this year, Deputy Prime Minister of Japan and Minister of Finance proposed
to establish a uniform tax on profits from transactions with cryptocurrencies. Under current rules, cryptocurrency traders can pay up to 55% tax on capital gains. The proposal of the Vice Prime Minister will allow to impose the income from operations with cryptocurrencies at the same rate as a stock traders.