Some prominent Japanese Crypto-asset firms have recently requested the Japanese government to strengthen their tax reforms. The firms claimed that the present-day Japanese tax reforms are not in sync with the tax rules of the rest of the world and it needs some major changes.
The joint proposal came from the Japan Virtual Currency Exchange Association (JVCEA) and The proposals come from the Japan Crypto-asset Business Association (JCBA). The forms are requesting new tax reforms in 2023.
Both of these organizations talked to the media, releasing a joint statement that contained all the key objectives of the new tax filing procedures. According to the companies, the current crypto tax filing procedure in Japan needs to be more streamlined and simplified. The report also outlined the inconsistencies within the current crypto tax system.
According to these Crypto-asset firms, the major issue in the present-day tax system is that cryptocurrencies in Japan are still classified as “other incomes” in tax declarations. This is not in sync with the other nations where cryptos usually come under the category of “capital gains.” In fact, in many countries, the profits earned from cryptocurrencies are not taxed at all until the individual converts their coins into fiat money.
Currently, the tax rate on crypto-related earnings depends on the total income of the individual. It means if an individual is earning a substantially high income, their crypto-relayed tax payments can be as high as 50%.
The organization that represents crypto firms in Japan also claimed that “if things continue in the status quo, the taxation system will become a bottleneck for the spread of crypto-assets.”