Japanese Tax Authorities Report a Decrease in Undeclared Income in Crypto
According to Japan’s tax authorities, the average value of undeclared income in crypto decreased by 19% in 2022. The Japanese National Tax Agency (NTA) recently released its annual summary of tax investigations, which included data on crypto tax evasion.
The NTA conducted 615 investigations into citizens’ crypto holdings based on their tax declarations for 2022, an increase from 444 in the previous year. Out of these cases, the agency found tax violations in 548 instances, representing a 35% rise compared to 2021.
However, the average value of undeclared crypto holdings dropped from ¥36,590,000 ($245,000) in 2021 to ¥30,770,000 ($206,000) in 2022.
In August, Japanese regulators announced that citizens would be exempt from capital gains tax on unrealized gains in crypto. This means that taxes on crypto assets held without trade operations during the fiscal year will not be imposed.
Japan has also joined nearly 50 other nations in pledging to adopt the Crypto-Asset Reporting Framework into their domestic law systems.
Hot Take: Japanese Crypto Tax Evasion Decreases as Regulations Tighten
The latest report from Japan’s tax authorities reveals a decline in undeclared income related to cryptocurrencies. This decrease can be attributed to increased scrutiny and stricter regulations surrounding crypto taxation. With more investigations being conducted and a higher number of tax violations identified, it is evident that authorities are actively targeting individuals who fail to report their crypto holdings accurately. Additionally, the exemption from capital gains tax on unrealized gains provides further incentive for taxpayers to comply with the rules. As Japan aligns itself with international standards for reporting crypto assets, it sends a clear message that tax evasion will not be tolerated in the crypto space.
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