Huge Taxes on Japanese Crypto Investors
Crypto traders from the Land of the Rising Sun will be hit with annual income taxes reaching up to 55%
Japanese investors in cryptocurrencies will now have to pay a capital gain tax of between 15% and 55%, which may be well above the tax on profits from trading in stocks and foreign currencies that are about 20%, Bloomberg reports.
The huge difference comes as the Japanese National Tax Agency treats cryptocurrency earnings as ‘miscellaneous income’. The highest figure will apply to individuals who have accumulated more than JPY 40 million in annual profits, or about USD 367 000.
Meanwhile, neighbouring South Korea has declared a 24.2% tax on crypto exchanges, while Singapore does not tax capital gains from crypto investments.
The Japanese government is expected to collect a large revenue as most of the Bitcoin trading (40%) is done against its national currency, the yen.
It is reported that two teams, in Tokyo and Osaka, are creating a database of cryptocurrency investors in order to enforce tax collecting. The same measure has been introduced by the US Internal Revenue Service (IRS) with the goal to track crypto users who failed to report their profits.
Burnt from the Mt. Gox meltdown in 2014, the Japanese government started considering Bitcoin and Ethereum legal methods of payment with the Japanese Virtual Currency Act of April 2017. Many analysts find a direct link between this and the skyrocketing of the value of these two cryptocurrencies.
The Asian country has always been considered one of the most crypto friendly in the world, so the newly introduced high taxation is received with mixed reactions in the crypto community. It is fair to say though, that nations across the globe have always searched ways to tax crypto exchange, creating various types of financial institutions like the South Korean Virtual Currency Taxation Task Force and the US IRS team. Even India has started issuing taxation notices to thousands of cryptocurrency traders.