Japan Seeks To Simplify Crypto Tax Reportingbr>
The Japanese Tax Commission is looking to adjust the tax filing procedure to stimulate a more thorough reporting of cryptocurrency gains.
During a general assembly meeting on October 17, the commission discussed possible improvements to the complex tax filing regime currently in place in the country. 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 price of a cryptocurrency can also vary on different exchange platforms.
The tax agency is reportedly planning a new system that would standardize the current process as well as simplify calculating tax on crypto profits against both fiat and other cryptocurrencies.
“Since it is necessary to take into consideration frameworks other than the taxation system and business practices, we will hold a small meeting of experts to deepen the discussion while listening to outside opinions,” said Minoru Nakazato, president of the Tax Commission.
Japan currently has seven income tax brackets, with the tax rates ranging from 5% to 45% based on earnings. On top of the progressive tax rates, inhabitant taxes are levied in Japan by prefectural and municipal governments at the rate of 10%. Crypto profts fall under “miscellaneous income” and crypto traders could pay up to 55% in capital gains tax.