Japanese crypto firms are calling on the government to reform the tax system, claiming that the current system is inconsistent with tax laws in other countries.
The proposal is Japan Crypto Asset Business Association (JCBA) and Japan Virtual Currency Exchange Association (JVCEA), Around CoinPost has released a joint report calling for 2023 tax reform.
The agency also responded to the press, detailing its purpose, which primarily focused on the need to simplify the filing process for crypto taxes. Not only did he point out that Japan’s policy is out of step with “overseas crypto-asset tax regimes,” he argued that the institution has an important role for cryptocurrencies to play in the world. Web3.
The latter point could catch the eye of senior lawmakers from the ruling Liberal Democratic Party (LDP), who launched the Web3 task force.task force too talked about the need Rethink Japan’s crypto tax rules amid claims that overly restrictive protocols are forcing companies, talent, and capital abroad.Opposition leader become a voice In their own call for change.
The crux of the matter is that cryptocurrencies are currently classified as “other income” on tax returns. This is very different from other countries where cryptocurrencies are typically subject to capital gains tax. In many countries, crypto-related profits are not taxed at all until the coin is converted into fiat currency.
However, in Japan (and under current rules), the tax rate on cryptocurrency-related income varies according to an individual’s total income. This means that cryptocurrency tax payments can rise to around 50% for high-income earners.
In contrast, foreign exchange transactions are subject to a flat 20% capital gains tax.
The JBCA said it conducted an investor survey and spoke to more than 26,000 people, and data from the survey showed that the tax reforms proposed by the JBCA would actually lead to an “increase in the number of taxpayers” and It argued that it indicated “not necessarily so”. Leading to a decrease in national revenue due to crypto taxes.
The agency further claimed to have “calculated” based on a 20% capital gains tax and found that tax revenues actually increased by “about 20%” under this system.
However, these calculations seem to take into account the fact that demand for cryptocurrencies is likely to increase if tax reform takes place.
The group, which mainly represents crypto-related companies, argued that the tax system will become a bottleneck to the spread of crypto-assets if things continue as they are. This will hamper “the development of products and services in Japan” and lag behind their Asian, European and American counterparts in the Web3 era, the agency said.
He added that the level of regulation that the crypto sector currently complies with in Japan is “inconsistent” with existing tax laws, noting that the industry is becoming even more “sound” than the traditional financial world. suggesting. As such, the JBCA suggested that a more generous tax regime would be appropriate.
JVCEA represents a national and international cryptocurrency exchange registered with regulatory authorities. Financial Services Agency Or you are in the process of applying for a business license.
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