Taxation on cryptocurrencies is a major topic of discussion for most countries. Some nations levy very less or even zero tax on crypto gains, while some countries like India have put it under a 30% bracket. Things are even worse in Japan as investors face up to 55% tax on their crypto investments there. However, Japan’s new proposal calls for a lower crypto tax and loss carryforward which could help relieve crypto investors and change things going forward.
Japan’s new crypto tax proposal
A tax reform request was recently submitted by the two largest crypto advocacy groups in Japan. They are the Japan Crypto-Asset Business Association and Japan Crypto-Asset Exchange Association. It calls for a lower 20% tax, loss carry forward, and tax exemption on unrealized gains. Unless these reforms are accepted, crypto adoption in Japan will always be a far-fetched dream.
The crypto advocacy groups explained the need for a better tax filing method for individuals. They also compared Japan’s crypto strategy with other countries.
Current tax laws in Japan
When you hear about the tax policies in Japan, the 30% tax in India starts to sound good when for the matter, we all know that even that’s too much. Japan is considering crypto profits under “miscellaneous income” if it crosses JPY 200,000 or around $1,500. So, investors will have to pay more than half (55%) of their profits to the government as tax. The profits also include mining or lending.
Compared to the equity taxation in the country, which is at 20%, crypto tax is insanely high. The government is indirectly saying that do not invest in crypto, or we will take more than half of your money away.
Japan is very strict as well regarding taxing crypto investors. Individuals that evade tax are investigated thoroughly, and a person was even jailed for a year and fined $200,000 for the same.
Countries with better crypto tax reforms
Some of the nations that are currently having the best tax laws are Thailand, South Korea, Germany, El Salvador, Singapore, Malta, and Portugal, among others. Most of these countries have zero crypto tax, or if not, the tax bracket is much lower compared to other nations.
What are your thoughts on Japan’s new proposal that calls for a lower crypto tax? And do you think that it will be accepted? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.