December 4, 2018 11:49 PM
The tax regulator seeks to tighten its grip during the country’s 2019 tax reformation restructuring.
According to a report in Japanese newspaper Mainichi Shimbun, the National Tax Agency (NTA), Japan’s tax regulatory body, is working to introduce strategies to curb tax evasion on cryptocurrency transactions from crypto investors. The NTA plans to introduce a system that will target defaulters with large earnings from cryptocurrency transactions, which will be established in the 2019 tax reform outline and put into action in 2020.
The report notes that, currently, under Japan’s Income Tax Act, profits gained from virtual currencies are classified as miscellaneous, and that those who gain at least 200,000 yen (roughly $1,775) a year in virtual currency earnings are required to declare it as income. A study conducted by NTA officials showed that over 300 individuals declared they had earned at least 100 million yen ($887,445) in cryptocurrency during the late 2017 and early 2018 crypto boom.
The current framework allows crypto exchanges and other businesses that deal in cryptocurrency to provide data on customers voluntarily to the NTA, with the right to refuse to do so. When reformed, the new system will allow the taxation authority to demand that businesses hand over personal information of their customers, including names and addresses.
That’s not to say the Japanese government won’t be taking some privacy into account. The NTA will only be allowed to demand information from those they believe to have earned at least 10 million yen ($88,744) from cryptocurrency transactions, and only after they have confirmed that the individual failed to report at least half of that income. Businesses will also be allowed to appeal information requests.
It isn’t specified whether or not the NTA will change the amount of yen one must declare they made in cryptocurrency (currently 200,000 yen). All that’s made clear is the amount that needs to be earned for it to investigate.
The NTA’s reformation plan comes a few days after the Jiji Press reported that the Financial Services Agency (FSA), Japan’s financial regulator, is working to introduce strict ICO regulation to protect investors from fraud.
Nicholas Ruggieri studied English with an emphasis in creative writing at the University of Nevada, Reno. When he’s not quoting Vines at anyone who’s willing to listen, you’ll find him listening to too many podcasts, reading too many books, and crocheting too many sweaters for his dogs, RT and Peterman.
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