Japan to introduce new reporting system to prevent crypto tax evasion
It’s no secret that Japanese authorities are looking to take control over tax money it feels is lost in the crypto space. The country is behind an effort being developed by the G20 to implement a global crypto tax strategy that could see governments receive millions of dollars in payments. Back home in Japan, regulators are now looking to introduce a new system that will report significant profits from crypto-based transactions, helping the country recover even more funds.
According to the Japanese media outlet Mainichi Shimbun, the new system to be implemented will give the National Tax Agency (NTA) the ability to gather data from transaction intermediaries, which include crypto exchanges. The NTA will have the authority to request information—such as names, addresses and personal ID numbers—on customers that it suspects of tax evasion. If everything goes according to plan, the system will be developed next year, with an anticipated implementation for the new fiscal year beginning in April 2020.
Not all individuals would be targeted by the new system. The media outlet quotes several sources who said that only those who earn over JPY10 million ($88,700) through crypto transactions will be held accountable.
Currently, crypto exchanges and other companies that are deemed intermediaries only give up data voluntarily. They have the legal ability to refuse to hand over information, but this could change with the new legislation. The exchanges could be forced to adhere to the requests, but would still maintain the right to appeal any request it feels is unwarranted.
The impact won’t be felt widespread, at least not initially. According to a recent survey conducted by the NTA, only just over 300 people indicated that they earned more than 100 million yen through crypto last year. Given the current market slide, the number has probably dropped significantly.
Japan is also ready to come down hard on initial coin offerings (ICO). The Japanese Financial Services Authority (FSA) announced this week that it would introduce stricter regulations on the offering in order to protect investors from fraud. Going forward, any entity wishing to launch an ICO would have to first register with the FSA.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.
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