Japanese tax authorities to combat under-reporting cryptocurrency investors

Although cryptocurrency trading can lead to considerable profits, not everyone is reporting their gains, the Asahi Shimbun writes. Approximately 50 individuals and 30 companies failed to report crypto-related income over a period of several years until March. The undeclared income amounts to 10 billion yen ($93 million).

The Tokyo Regional Taxation Bureau has been investigating cryptocurrency investors; it asked cryptocurrency exchange operators to submit information regarding their clients’ business transactions from last year.

Due to the extent of under-reported gains, tax authorities are now considering filing criminal tax evasion complaints, targeting the biggest earners and those applying “nefarious methods.”

In Japan, cryptocurrency-related gains are classified as miscellaneous income, which doesn’t have to be reported by salaried employees if it is under 200,000 yen. If the gains exceed 200,000 yen, the investor is expected to pay a tax of up to 55 per cent.

Authorities are planning to introduce measures to combat under-reporting. More specifically, starting from January, they’re planning to ask private-sector exchange operators to give them names of their clients if they fulfill certain requirements, for instance, conduct transactions that exceed a certain amount. Those who fail to comply will face penalties.