Regulation of Blockchain: National Tax Agency of Japan Released a Q&A Regarding the Tax Calculation

August 8, 2018

On December 1, 2017 the National Tax Agency released a statement relating to regulation of blockchain titled “Tax Calculations on Cryptocurrency Investments.”

How regulation of blockchain system will work

Tax is charged if:

  • Converting cryptocurrencies into a legal currency
  • Purchasing items with virtual currency
  • When virtual currency is exchanged for another virtual currency
  • Regardless of how assets are stored.

Under current tax laws, tax is not charged for holding cryptocurrencies. If sold or exchanged, however, up to 55% tax may be charged, calculated proportionately to value. Furthermore, future legislations may see “20% tax on assets considered shares.”

Below, quoted from the National Tax Agency HP regarding the regulation of blockchain:

In principle, profits arising from selling or using virtual currency such as Bitcoin are classified as miscellaneous income unless taxed as business income (requires income tax filing).

Losses arising from the calculation of the amount of miscellaneous income can not be totalized with other income.

Cryptocurrency acquired via mining is subject to business income or miscellaneous income taxation. The calculation of profit is as follows: profit – necessary expenses = taxable income

A version of this article originally appeared in Token News.

Related Article
Stablecoin: What you need to know
Stablecoins directly backed by fiat currencies or commodities are said to be centralized, whereas th...

May 25, 2019

South Korea Authorizes 9 Fintech Startups, Companies for Sandbox
South Korea has approved 9 fintech firms for its regulatory sandbox, as the country moves to take th...

May 25, 2019

Singapore’s Regulator Considers Licenses for Digital-Only Bank
The Monetary Authority of Singapore is reportedly considering digital-only licenses for online banks...

May 25, 2019

Blockchain-powered Ride-sharing Service Launches in Cambodia
With stiff competition among ride-hailing apps in Southeast Asia, a Singaporean ride-sharing app has...

May 24, 2019

We provide information about Asia Blockchain Review latest activities as well as global blockchain news and research. Subscribe to our Newsletter now or Contact us