One Japanese political committee has taken it upon itself to fight for a simplified cryptocurrency tax plan.
The Government Taxation Investigation Committee (GTIC), which serves as an advisory body to the Prime Minister, began discussions on Wednesday to propose a simplified cryptocurrency tax payment plan, which they say is currently unnecessarily complex in Japan.
The committee argues that because there are many kinds of cryptocurrency profits that require taxation alongside capital gains. Taxpayers are failing to declare the correct total in their tax returns as the process is simply too complex.
The profit obtained by selling cryptocurrency is currently accounted for as miscellaneous income, with crypto earnings over JPY 200,000 (USD 1,783) subject to income tax.
However, cryptocurrency is taxed not only on the gains from the disparity between the acquisition price and the selling price but also on the profit obtained by its exchange with other virtual currency or conversion to fiat. Even if a product is purchased using the digital currency which then accrues an unexpected financial appreciation, it remains subject to taxation.
Another issue arises as the method of storing the transaction history data necessary for the profit calculation is different with each cryptocurrency exchange company, meaning it is particularly challenging for Japanese taxpayers to configure the correct totals.
Offering a solution
GTIC says that a whole new system is required that can accurately reflect the income and profit in an accessible way.
Local news outlet Sankei reports that officials from GTIC shared in a press conference: “Since it is necessary to take into consideration the framework other than the taxation system and business practices as well, we will hold a small expert meeting and outside opinions. I will deepen the discussion while listening. ”
The future system would be required to “grasp the asset price appropriately.”
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