Over 300 Japanese Traders Made USD 1 Million from Crypto Trading in 2017

The report of Japan’s National Tax Agency shows that 331 Japanese cryptocurrency investors earned over JPY 100 million each

by Nina Dimitrova
29 May • 2 mins
In News

A total of 331 Japanese investors have made over JPY 100 million (a little less than USD 1 million) each from trading in various cryptocurrencies in 2017, a report of the country’s National Tax Agency (NTA) shows.

According to The Japan Times, the NTA report is based on the filed tax return forms. Under the Japanese tax law, profits from cryptocurrency investments are taxed between 5% and 55%.

At the end of 2016, the tax authorities issued a rule that cryptocurrency trading earnings must be reported as “miscellaneous income” - the same classification used for royalties and fees for paid speeches, for example.

The total cryptocurrency “miscellaneous income” for 2017 reported to the Japanese tax authorities rose 50% year-on-year, or by about JPY 30 billion. Yet, the NTA believes there are more people who earned over JPY 100 million from crypto investments.

“We think there are more people who made income over ¥100 million,” said an official from the National Tax Agency, as quoted by The Japan Times. “We are now in the process of finding out whether people are hiding profits from cryptocurrency.”

According to Japanese tax accountants, however, some people are confused how to calculate their earnings from crypto trading and many have made profits, but have lost them in the following market downturn.

“I think there are many people who may be unable to pay these taxes,” Yasuhiko Sugiyama, a tax accountant familiar with cryptocurrency taxation, told the news outlet.

Cryptocurrency trading is quite popular in Japan. The results of an investigation of the Japanese Financial Services Agency (FSA) published last month, revealed that there are at least 3.5 million active cryptocurrency traders in the country. The data was gathered from around 17 regulated Japanese exchanges and spanned the year till the end of March 2018. Based on the data from those 17 exchanges, the 2017 crypto trading volume in Japan is estimated at around JPY 640 billion (almost USD 6 billion).

Last year, Japan become the first country to officially recognize cryptocurrencies as a legal payment means and to legalize and regulate the market.