Japanese cryptocurrency investors will pay between 15 and 55 percent on their profits declared on their annual tax filings this year, Bloomberg reports Thursday, Feb. 8.
The Japanese National Tax Agency had already ruled “last year” that capital gains on transactions of virtual currency are considered “miscellaneous income,” Bloomberg writes.
The tax on cryptocurrency profits is higher than the around 20 percent tax levied on profits from stocks and foreign currencies, with the higher percentage tax applying to those who earn more than 40 mln yen a year (about $367,600).
In comparison, South Korea had announced in Jan. that crypto exchanges will be taxed 24.2 percent, in line with the existing tax policy for corporations.
According to Bloomberg, around 40 percent of Bitcoin (BTC) trading recently has been against the yen, meaning the country will receive a large revenue from taxing crypto.
Image source: Bloomberg
Bloomberg reports that the Japanese National Tax Agency is creating a database of cryptocurrency investors, potentially to ensure enforcement of the tax laws, as well as retaining teams in Tokyo and Osaka to watch electronic trading.
The US Internal Revenue Service (IRS) also reported today that they have created a 10 person team of investigators aimed at tracking down crypto users that failed to report their profits in their tax declarations.
Japan had recognized Bitcoin as a legal method of payment back in April 2017, a step towards helping the government prevent unregulated exchanges from hacks and mismanagement like the Mt. Gox meltdown in 2014.