As part of its bid to tackle tax evasion in the country, Japan’s National Tax Agency (NTA) is about to deploy some 200 tax specialists who will investigate undeclared gains from online transactions, including cryptocurrency trading.
The team will be deployed across 12 regional offices, and will directly assist with investigations as well as sharing knowledge and expertise with tax officers around the most common sources of avoidance, Nikkei Asian Review reported.
Aside from undeclared crypto gains, the tax specialists will also investigate income derived from monetized videos, and other online means. While cryptocurrency is a significant focus of the new enforcement action, the tax agency has said it will also examine online income sources including private room bookings, earnings from auction sites and other types of tokens and points that can be converted for cash.
To date, authorities in Japan have come up against opposition from online platforms after serving demands they share data with the tax office. However, a new law coming into force in January of next year will give the NTA the power of law to demand platforms hand over information on request.
A senior NTA official said this would give the authorities more power to tackle tax evasion directly, noting, “The fact that we are able to seek and confirm client data under the force of law will become a powerful weapon.”
The information obtained on demand will be used by the investigating officials to compare against declared income. The authorities expect to recover significant underreported income from online sources, and in particular from cryptocurrency gains, through the process.
The move is the latest step from authorities in Japan to tighten up the cryptocurrency sector. New laws progressing through Japan’s legislature will raise the compliance burden even further for companies operating in the country, which is seen as both a regional and global leader in cryptocurrency policy.
With other countries battling with their own problems of cryptocurrency tax evasion and fraud, the new approach in Japan will serve as a test case to other regulators, treasuries and law enforcement agencies.
To receive the latest CoinGeek.com news, special discounts on CoinGeek Conferences and other inside information direct to your inbox, please sign up for our mailing list.