in ,

Japan Crypto Asset Regulations

In terms of crypto asset, Japan is the second largest country in the world. The current tax and legal status of virtual currencies in the Land of the Rising Sun is relatively stable, and recent government changes aim to make the country more attractive to cryptocurrency companies and traders. In general, bitcoin and similar currencies are in the “other income” category, which depends on annual income and can reach a maximum tax rate of 55%.

Legal status of cryptocurrencies in Japan

Under current law, cryptocurrencies (仮想通貨 – Kasō tsūka) are officially considered legal assets in Japan and are classified as other income. Basically, this tax category caters to all kinds of occasional sources of income, which means that cryptocurrency trading is treated the same way as selling lemonade on the street. Japan’s National Tax Administration (NTA) also does not (yet) distinguish between individuals and companies using cryptocurrencies.

Cryptocurrency taxation in Japan.

In Japan, all types of virtual currencies are classified as “other income” and taxed as such. If you have an annual income and receive more than 200,000 yen (about €1,600) in other income, you must pay taxes accordingly.

The tax rates for this category depend on your annual income and start at 5% and gradually increase to a maximum of 45%. In each case, however, you must add a 10% municipal tax, which eventually leads to a maximum rate of 55%. For people with low annual incomes, tax rates can still be favorable. In Japan, as well, most crypto traders are in a higher income bracket and thus have to pay 55% tax. Profits from a stock portfolio fall into a different category and are taxed at a flat rate of 20%.

Currently, owning cryptocurrencies, but not trading them, is not subject to tax. Basically, any profit made with bitcoin or similar currencies is subject to tax.

Cryptocurrency trading in Japan

The same principle of taxation applies to cryptocurrency trading. The profit you make from it is taxed under the “other income” category, which means that a maximum rate of 55% is applied based on your annual income. Recently, the Financial Services Agency of Japan (FSA) has taken steps to regulate trading and now requires cryptocurrency exchanges to register due to concerns about cybersecurity and AML/CFT.

Unfortunately, if you have losses from cryptocurrency trading, you can’t simply deduct them from your income or other assets. Currently, only losses from real estate, business, transfer, and forestry income can be deducted from income, and cryptocurrencies don’t yet fall into any of these categories. If the taxpayer simply refuses to pay the tax due, certain penalties will be imposed. They usually include a 20% surcharge on the original tax amount and a special penalty for late payment.

To summarize, the only way to not pay any tax on cryptocurrency transactions is “hodl”, or as they say in Japan ガチホ (Ga-Chi-Ho).

Anti-Money Laundering Laws and Regulations in Japan.

Money laundering and terrorist financing requirements and obligations are clearly defined in various laws in Japan. These laws include the Prevention of Transfer of Proceeds of Crime Act and the Foreign Exchange and Foreign Trade Act. Financial institutions wishing to provide services in Japan must comply with money laundering and terrorist financing requirements in order to obtain the necessary licenses. Japan is committed to protecting the soundness and stability of the financial system along with anti-money laundering laws and regulations.

The Golden Capitalist is powered by Global RCG, the leading provider of mobility assets in America. Reach out if you want to know more about 2nd residence & citizenship.

What do you think?

Written by Freelancer

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Hong Kong Cryptocurrency Regulations

Miami Heat Becomes Official Partner Of FTX Cryptocurrency Exchange