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Japan is Working to Simplify Cryptocurrency Tax Returns

According to a Japanese media, a tax policy committee in Japan is studying ways to simplify the taxation of cryptocurrencies.

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According to a Japanese media, a tax policy committee in Japan is studying ways to simplify the taxation of cryptocurrencies.

Officials believe that by making tax procedures simple and easy to follow, authorities can encourage citizens to report their earnings related to digital currencies. Currently, the rules and effective filing procedures are too complicated, which leads to extensive tax evasion.

“There are many types of taxable profits related to virtual currencies, apart from earnings on sale, but because the calculation method is too complicated, taxpayers do not declare them on their final tax returns.”

The committee said.

The committee is planning a new system that would standardize the tax filing process and make it easier for taxpayers to calculate their profits on sales of digital assets against fiat currencies and other cryptocurrencies.

Japan is striving to control the burgeoning cryptocurrency industry by improving regulatory and supervisory measures, while taxes are one of the areas of concern for the authorities.

Currently, citizens have to file a tax return on the profits obtained from cryptocurrency transactions of more than 200,000 yen (about US $ 1780) per year. However, there are other gains that can also be taxed, such as the unexpected benefits obtained when buying a product with virtual currency.

Apart from that, cryptocurrency exchanges use different methods to store the transaction history in order to inform, which makes it difficult to make the head or the tail of the same. Taxpayers can not reflect all of their earnings correctly and omit the filing of cryptographic taxes altogether.

Speaking at the press conference after the meeting, the head of the Tax Policy Committee commented:

“Given that it is necessary to take into account the broader concept that includes both the tax system and commercial practices, we will hold a meeting of experts to gather external opinions to broaden the discussion on the subject.”

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