Japan to Automate Cryptocurrency Tax Returns

July 17, 2018 Taxation in Japan

Crypto-tax in JapanTOKYO – Japan is simplifying tax filing for cypto-traders, meaning only those making significant profits will be filing returns.

The National Tax Agency of Japan has disclosed its revised rules and systems for declaring profits from cryptocurrency transactions, unveiling a system which automates away a lot of the complexity of calculating the tax obligations.

The tax authority is now working on the implementation of an automated process which would automate the process of calculating the tax obligations arising from trades of cryptocurrencies made by Japanese taxpayers.

Previously traders were required to calculate the profits earned from cryptocurrency by comparing the value of the coin at the time of purchase against the value at the time of sale, and also compare that against what income tax band the taxpayer falls under.

The NTA now wants to automate the system by retrieving the appropriate information from cryptocurrency exchanges automatically, and then carrying out the calculation themselves.

If the system functions as intended it would eliminate the need for small-scale traders to declare the incomes derived from cryptocurrency trades.

However, any traders who saw profits of more than JPY 200 thousand would still need to file a tax return for the income.