News

Japan is working to simplify cryptocurrency tax filing system

Japan’s Tax Commission is looking for ways to simplify the current tax filing system for cryptocurrencies in order to ensure investors accurately report their gains.

On October 17, the commission, which guides policy on taxation and also advises the prime minister, held a general assembly meeting to discuss potential improvements to the process.

The committee is planning a new system that would standardized the tax filing process and make it easier for taxpayers to calculate their profits on the sales of digital assets against both fiat currencies and other cryptocurrencies.

At the moment, calculating crypto profits can be cumbersome because the price for a cryptocurrency on different exchanges can vary, while the way different platforms store their historical transaction data is also not standardized. As such, taxpayers may find it difficult to submit a proper tax filing.

“Since it is necessary to take into consideration frameworks other than the taxation system and business practices, we will hold a small meeting of experts to deepen the discussion while listening to outside opinions,” – Minoru Nakazato, president of the Tax Committee, said.

Currently, profits from the sale of cryptocurrencies in Japan fall under “miscellaneous income.” A sliding tax rate from 15 to 55% is applied, depending on the actual amount of gains above a threshold of 200,000 yen per year, or about $1,800.