Reports have indicated that some investors are relocating in search of alternative taxation regimes in order to avoid heavy capital gains taxes. Japan currently taxes capital gains on profits derived through virtual currency trading at between 15% and 55%.
Also Read: India’s Tax Department Issues Notices to 100,000 Crypto Investors
Japan’s cryptocurrency traders are bracing for the oncoming Japanese tax season, which runs from February 16th until March 15.
In Japan, all cryptocurrency earnings are required to be reported as ‘miscellaneous income’, incurring capital gains taxation of between 15% and 55% due to virtual currencies being legally classified as ‘property’.
Some traders have criticized the income brackets chosen by the National Tax Agency, with the top bracket applying to payers with an annual income of 40 million yen (approximately 375,000). By contrast, the top bracket is charged only 20% for income derived from foreign exchange or stock market trading.
The heavy taxes faced by large-scale bitcoin traders has prompted a number of Japanese cryptocurrency traders to explore relocating to jurisdictions offering more lenient taxation on earnings derived through virtual currencies.
According to Bloomberg, the chief executive of Shiodome Partners Tax Corp, Kengo Maekawa, indicated that “a handful of cryptocurrency-rich investors have already left Japan.” Mr. Maekawa stated that his firm has recently experienced a surge in clients in their 30s and 40s seeking tax advice on income derived from cryptocurrencies.
Some traders have also complained that certain aspects of Japan’s present tax requirements regarding bitcoin are unclear. Hiroyuki Komiya, the manager of a Tokyo-based distributed ledger technology consulting firm, stated that “The government hasn’t clarified certain details, so you’re left unsure whether you’ve got it right or not.” Mr. Komiya stated that he was able to reduce his taxable income by “a few million yen” when using an “overall average” rather than a “moving average” when conducting calculations.
What country do you think offer the best tax regime for cryptocurrency traders? Share your thoughts in the comments section below!
Images courtesy of Shutterstock
Want to create your own secure cold storage paper wallet? Check our tools section.
The post Japanese Crypto Investors Flee Capital Gains Taxation of up to 55% appeared first on Bitcoin News.