Japan Finalizes System to Go after Cryptocurrency Tax Evaders
Japanese cryptocurrency traders who have been lackadaisical about paying their taxes are in for a rude shock next year. The country’s government is currently putting finishing touches to a plan that would ensure these set of persons pay their tax.
Reports emanating from Japanese news outlets indicate that the government is designing a system to apprehend traders who are refusing to pay the required taxes made from profits gotten through cryptocurrency traders.
Sources close to the matter have given details about the system, stating that it (the system) would give power to the National Tax Agency (NTA) of Japan to “request the cryptocurrency transaction information of individuals” that are suspected of evading tax.
Currently, in Japan, the Income Tax Act covers any profits that are gotten from cryptocurrency trading. Thus, if an individual earns above 200,000 yen ($1,700) each year, they are mandated to pay tax on the profits.
The source also added that cryptocurrency businesses based in the country can choose whether or not to hand over information regarding their customers. But with the new system, that would be a thing of the past as all businesses would be mandated by law to submit information about their customers.
Names, personal identification numbers, and addresses will be included in the information. Even though this sounds like it could deal a heavy blow to the much-touted anonymity conferred by cryptocurrency, it is not going to affect everybody.
The NTA will begin its work by focusing on the big-time traders – individuals who are suspected to have earned more than 10 million yen ($88,000) from trading in cryptocurrency. For now, small-time cryptocurrency traders are, at least, safe.
Reports have stated that the new tax system will roll out in Japan’s next fiscal year, which usually runs from April 1 to March 31.
This latest crackdown on the Japanese cryptocurrency industry is not the first as the government tightens its regulation of the sector.
The Financial Services Authority (FSA) of Japan, earlier this year, conferred a self-regulatory status on its cryptocurrency industry, thereby allowing the Japan Virtual Currency Exchange Association (JVCEA) to monitor exchanges for any sign of violation.
Recently, the same FSA announced that it was mulling over plans to deploy “a regulatory framework for initial coin offerings” in its attempts to shield investors from fraudulent ICOs.
The Japanese authorities are finalizing plans that would see it go after the biggest cryptocurrency traders involved in tax evasion. Under the new system, cryptocurrency traders who have earned over 10 million yen ($88,000) from cryptocurrency trading will be asked to present their transaction information to the country’s tax agency.
Subscribe to the ICOholder’s newsletter to get other trending news in the world of cryptocurrency.