Japan Needs to Drop Bitcoin Tax
March 2, 2016 Taxation in Japan
TOKYO – Japan’s tax treatment of crypto-currencies is forcing consumers to buy digital coins from overseas in order to skip their tax obligations.
Ongoing controversy on the taxation of Bitcoins in Japan has come to a head, with calls being made for the digital currency to be exempt from consumption tax.
Bitcoins, and all other crypto-currencies, currently fall within the scope of the national 8 percent sales tax, if purchased with Yen from a local exchange.
If Japanese consumers purchase coins from overseas dealers, then they are liable to pay tax on the import, however due to the digital nature of the currency the national tax authorities have no means of determining when a purchase is made.
The oversight in the regulations of the sales tax has reputedly forced many Japanese consumers to abandon local crypto-currency exchanges, in favour of making purchases from overseas and not making a declaration for tax purposes.
Opponents of the tax treatment argue that the current regulations slow down the uptake of digital currencies in Japan, but also act as a heavy impediment to the local industry for digital coins.
Recently during a lower house budget committee meeting a member of the ruling Liberal Democratic Party asked the Finance Minister Taro Aso whether “…you consider not imposing consumption tax on Bitcoins in line with the international trend?”
The Minister suggested that Japan is currently on the right track, and follows other countries in taxing digital currencies.
Photo By: BTC Keychain