The Japanese NTA (Tax Agency) has announced a new strategic policy put in place by July 15th to promote and improve the environment for people and companies to spontaneously declare their virtual currency income tax returns.
NTA to Devise Simplified and Automated Tax Return Filing Method
Together with the Financial Service Agency and cryptocurrency related organizations, the NTA has reportedly said a simplified tax declaration method, which would automatically calculate profits made by selling virtual currencies and tax returns, is currently underway.
The NTA also urged private companies to utilize the software which can automatically calculate profits and losses made in cryptocurrency, and encouraged them to properly pay taxes, insisting the complicated tax payment method is now improved.
Earlier in April, the NTA held study sessions together with the FSA and Japan Blockchain Association aiming at exchanging opinions and thoughts on cryptocurrency tax filing methods. After a few of these study sessions, which are to be held until the end of 2018, the NTA intends to come up with a solid and concrete tax policy before next year’s tax return.
Simplifying Cryptocurrency Tax Calculation
Most of the difficulties for calculating profits obtained after selling cryptocurrencies relate to the different methods used by each crypto exchange for transaction history data storage. The NTA also pointed out the difficulties of managing distorted tax returns and cheating.
The NTA intends to solve these issues altogether by putting in place software capable of automatically calculating profits and losses and publicizing this service in support of tax returns made on crypto income mainly for IT companies.
Profits made after selling crypto would correspond to miscellaneous income. A tax return will be required to be filed for general company employees earning in crypto, if profits of more than 200 thousand yen ($1,800US) worth of crypto is earned between January and December of that year.
The crypto taxpayer’s burden would be eased only if the complicated calculation becomes automated. The NTA is also considering simplifying the tax declaration paperwork to ensure a secure tax payment system.
What do you think of Japan’s tax office improving the tax filing system for crypto earnings? Share your thoughts in the comments section below!
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