Japan aims to simplify cryptocurrency tax filings for investors
The country’s tax commission is working on a standardized filing process that would make it easier for investors to report their crypto gains according to a regional news outlet.
One of the big challenges that Japanese cryptocurrency investors face on tax day is accurately accounting for different exchange rates and prices across trading platforms. For an investor with a portfolio full of altcoins on multiple exchanges, tax day isn’t going to be any fun and reporting figures are likely to be inaccurate. It might not be like this forever though as Minoru Nakazato, president of the Tax Committee has acknowledged this painful process and promised to gather ‘experts’ together to discuss these challenges. Whether these talks actually lead to the implementation of a better system, only time will tell.
The Japanese government has so far acted favorably towards cryptocurrencies and since 2017, exchanges in the country have been regulated by the Payment Services Act and have been subject to money laundering regulations. Whilst complete decentralization of money might be a crypto fan’s ideal scenario, that isn’t likely to happen for a very long time at least. The way I see it, governments are still helping crypto adoption by investing resources into regulation, although many in the community would disagree I’m sure.
At the moment cryptocurrency investors in Japan are in definition limbo with profits having to be labeled as “miscellaneous income”. This comes with a sliding tax rate after profits of 200,000 Yen (roughly $1800). Comparatively, in the UK cryptocurrency gains fall under capital gains tax with a personal yearly tax-free threshold of £11,700. Are we going to see other governments making similar moves to get their slice of the tax pie? By doing so, one might argue that this kind of regulation could greatly legitimize cryptocurrency for the long haul.