Japan wants to make cryptocurrency taxation simple and user-friendly to stimulate reporting
|- The Japanese Taxation Policy Committee came up with a proposal to simplify the existing taxation procedures.
- More discussions to follow once the authority gathers external opinions.
A Taxation Policy Committee in Japan is looking into ways to simplify cryptocurrency taxation, Japanese media outlet Sankei News reports.
The officials believe that by making taxation procedures simple and easy to follow the authorities can incentivize citizens to report their cryptocurrency related gains. Currently, the effective filing rules and procedures are too complicated, which leads to extensive tax evasion.
"There are many kinds of taxable profits related to virtual currencies apart from gains on sale, but as the calculation method is too complicated, taxpayers fail to declare them in their final tax returns", the committee said.
Japan strives to take the booming cryptocurrency industry under control by improving regulation and oversight measures, while taxation is one of the areas of concern for the authorities.
Currently, the citizens have to file a tax return on profits obtained from trading cryptocurrencies over 200,000 yen ($1780) per annum. However, there are other gains that can be taxed too, like unexpected benefits received from purchasing a product with virtual currency.
Apart from that, the cryptocurrency exchanges use different methods for storing transaction history for reporting purposes, which make it difficult to make the head or tail of it. Taxpayers cannot reflect all their profits properly and skip crypto tax filing altogether.
Speaking at the press conference after the meeting, the head of the Taxation Policy Committee Nakazato Nakazato commented:
"Since it is necessary to take into consideration the larger concept that includes both taxation system and business practices, we will hold an expert meeting to gather external opinions to extend the discussion of the issue".
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