Reports surfaced earlier today by the Japanese news outlet, The Asahi Shimbun that authorities are taking a look into some of the bigger crypto transactions and whether they’ve correctly been declared for tax purposes. According to sources close to the publication, there are around fifty traders and about thirty companies that have an estimated $90 million worth of cryptocurrency income.
The report claims that come to the start of next year, the new system will be integrated that would allow:
“Tax authorities to ask private-sector exchange operators to provide the names of clients under certain conditions, such as conducting transactions exceeding a certain amount.”
The high rate of tax on cryptocurrency is classified under misc. income and can potentially go up by 55 percent, has led authorities to believe that there are some under-reporting their crypto-profits. The report reads:
“The authorities also believe that holders of about 7 billion yen of such income made efforts to conceal their income from cryptocurrency transactions. In light of the discovery, tax authorities are apparently considering filing criminal complaints over tax evasion against those who have made especially large gains or used nefarious methods, such as masking their identity.”
Japan has also revised its laws to provide more clarity over cryptocurrency. The legislation amending the Payment Services Act and Financial Instruments and Exchange Act was officially made law at the end of last month which will take effect in April 2020.
On top of the more significant changes, the act changes the term ‘virtual currency’ to something a bit more generic, ‘cryptographic assets’.
In addition, any firm so much as storing cryptocurrency will be seen as a ‘cryptogrpahic asset exchange’ and thus will be required to register and maintain what experts believe will be an expensive license.
The CEO of the Japanese token-based social media system ALIS, Masahiro Yasu said:
“Smaller companies will need abundant funds if more stringent management systems are required. It may be impossible to maintain existing business unless it changes.”
Source: Crypto Daily