Japan’s Tax Commission is looking to simplify crypto tax reporting

Japan’s Tax Commission is looking for ways to simplify the tax filing system for cryptocurrencies in order to ensure Japanese investors accurately report trading gains.

Japanese congressman and lawmaker Takeshi Fujimaki has proposed four crypto tax reforms.

These reforms include taxing gains from crypto investments at 20% rather than the maximum of 55%, allowing past crypto losses to be deducted from profits in subsequent years, making profits from trading between two virtual tokens tax exempt, and finally making all payments made in crypto exempt from sales tax.

Non-standardisation across exchanges

Calculating crypto trading profits can sometimes be difficult and confusing. The price for a cryptocurrency on different exchanges can vary, with different platforms storing their historical data in different standards. With this confusion, taxpayers may find it difficult to submit accurate tax filings.

The president of the Tax Committee, Minoru Nakazato, was quoted as saying: “Since it is 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 while listening to outside opinions.”

Some are speculating that these proposed changes will affect the market in a positive way as a result of the increased certainty for institutional investors to trade in a fairer and more transparent regulatory environment.