Japanese Investigation Committee has commenced discussions aimed at improving the system by simplifying tax payment procedure for virtual currency holders.
Reports by regional news outlet Sankei indicated that the committee, which also serves as the main advisory body for the prime minister commenced discussions on improving the policy on taxation on a general assembly meeting which was held on Thursday, October 17th.
The committee was of the idea that there currently exists many virtual profits to be taxed and the calculation method may prove cumbersome. As such, the need to develop a more improvised system which will simplify the tax payment procedure cannot be overlooked. The committee is therefore reportedly looking into establishing a new system which would address the current needs to enable the taxpayers to easily calculate their profits as well as the right amount of tax they each need to pay.
“Since its 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 whilst listening to outside opinion,” stated Minoru Nakazato, president of the Japanese Tax Investigation committee.
Separating cryptocurrency policy from ‘miscellaneous income’
A few months ago, Japanese lawmakers also suggested a change in the crypto taxation policy from its current classification- ‘miscellaneous income’ to a ‘separate declared taxation’ a move which was then shied by the country’s finance minister Taro Aso.
Aso, who also happens to be the deputy prime minister explained that he was being vigilant about making such a change. The minister was concerned about the overall public understanding of such a change. He identified the ‘international nature’ of cryptocurrencies as one of the major setbacks when it comes to changing their type of classification as a majority of residents might be opposed to the move.
Current tax trends
With cryptocurrency policy currently under the ‘miscellaneous income,’ Japanese levy on profits from such currencies run from 15% to 55% with the later being imposed on individuals with average annual earnings of $365,000, an equivalent of 40 million yen. This is unlike the approximately 20% tax imposed on stocks and foreign currencies.
Taxing of cryptocurrencies is taking shape with many states having already implemented a working tax system for cryptocurrencies or ideally thinking in that line. In the US for instance, cryptocurrencies were declared to be property, just like real estate by the Internal Revenue Service in 2014, therefore, making the long-term profit gained on the ‘property’ a subject to tax.