In line with the new Japanese crypto-philosophy, which is sure to allow the blockchain revolution to flourish in Japan, authorities are now looking towards reducing current cryptocurrency tax rates, in order to introduce a new tax standard, which will see investors and traders pay tax at a fairer and less aggressive rate.
As it stands, Japanese cryptocurrency regulations mean that exchanges need to follow very strict and stringent rules in order to allow for customer safety. This latest move could further bolster the support that the Japanese authorities seem to have for customers of cryptocurrency in Japan.
Current tax rates mean that traders can be charged as much as 55%, meaning in some cases they are losing over half of their profits to tax. This is because, at the moment they are considered a ‘miscellaneous income’ which in turn is actually incorporated into salary income too, meaning that people charged miscellaneous income tax are paying rates as high as 55%. The Japanese Minister of Finance, Taro Aso now understands that cryptocurrencies are not a form of miscellaneous income and thus, should be subject to fairer tax rates. According to Bitcoin.com:
“The Deputy Prime Minister’s proposal would enable crypto profits to be taxed at a uniform rate, the same presently enjoyed by stock traders. Ever since the Japanese government declared crypto profits are taxed as miscellaneous income, many industry participants have criticized this tax treatment. 11,786 of them soon signed a petition on Change.org calling for the NTA to tax crypto profits like they do stocks.”
Moreover, according to PwC:
“Capital gains from sales of certain securities (including shares/equity interest in corporations, warrant bonds, etc.) are taxed separately from other sources of income at a flat rate of 20.315% (i.e. 15.315% national tax and 5% local inhabitant’s tax).”
See more from Bitcoin.com, here- https://news.bitcoin.com/japan-revise-crypto-tax/
So, with this in mind, these new regulations could see cryptocurrency tax charged at a standard rate of 20%. High, but not even half as high as the current 55% cap that exists within Japan.
This is yet another positive move from Japanese authorities towards ensuring a fairer and more co-operative environment for cryptocurrency trading in the country. We always say this, but Japan really are spearheading a communal movement that in turn will make cryptocurrency adoption easier. By ensuring that traders can trade safely, through moderated exchanges and by ensuring they are taxed fairly, more and more people will see cryptocurrency as an attractive investment and thus, not only will this do great things for Japan, it will do great things for the rest of the crypto-sphere too.