According to a report by The Asahi Shimbun on June 5th, the newspaper’s sources have said that the Japanese government could start tracking larger cryptocurrency transactions in an effort to identify trades that are not being declared for tax purposes.

High Tax Rate Blamed for Underreported Crypto Earnings

Citing unidentified sources, the newspaper said the move was prompted by findings that some 50 traders and 30 firms in Japan had not declared cryptocurrency incomes worth a combined 10 billion yen (approx. US$92.3 million) over the last few years.

The scale of underreported revenue is likely due to the high rate at which crypto earnings are taxed. Classified as “miscellaneous income,” crypto gains are taxed at up to 55 percent. In comparison, earnings from trading stocks are only taxed at 20 percent.

According to the report, an investigative team at the Tokyo Regional Taxation Bureau asked some cryptocurrency exchanges to submit clients’ transaction data, allowing it to build a list of accounts that made sizable earnings.

New Regulations to Keep Crypto Earnings in Control

A new law is set to launch in April next year to provide Japan’s National Tax Agency with access to the data of users whose crypto earnings exceed 10 million yen (US$88,700).   

Data collected by other regional tax offices around Japan has indicated that traders with a combined 7 billion yen (US$9.26 million) of cryptocurrency income had attempted to conceal it for tax purposes.

The data has prompted tax authorities to consider filing criminal complaints over tax evasion against traders who hid larger amounts or employed illicit means to do so.

Source: https://cointelegraph.com

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