Insights Trends Japan Witnesses Drop in Undeclared Crypto

Japan Witnesses Drop in Undeclared Crypto

November 27, 2023 Trends
BITmarkets | Japan Witnesses Drop in Undeclared Crypto

Japan's tax authorities reported that in 2022, the average amount of undeclared cryptocurrency income decreased by 19%.

The Japanese National Tax Agency (NTA) published its annual summary of tax investigations on November 24. Data on the investigation into cryptocurrency tax evasion is also included in the 13-page document.

From 444 in 2021 to 615 in 2022, the NTA opened investigations into citizens' cryptocurrency holdings based on their tax returns.

The agency discovered tax violations in 548 cases, a 35% rise over the 405 crypto tax evasion cases it found in 2021.

Nonetheless, from 36,590,000 Japanese yen (roughly $245,000) in 2021 to 30,770,000 yen ($206,000) in 2022, the average value of undeclared cryptocurrency holdings decreased.

Japanese authorities, including the Financial Services Agency (FSA) and the NTA, reaffirmed in August that residents would be exempt from a capital gains tax on unrealized cryptocurrency gains.

As a result, they will avoid paying about 35% of the taxes on the cryptocurrency assets that were kept idle for the fiscal year.

Japan became one of the nearly 50 countries that promised to “swiftly transpose” the Crypto-Asset Reporting Framework, a new global standard on the automatic sharing of data among tax authorities, into their national legal frameworks this month.



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