Japanese tax polices are planning to take action on the under-reporting of cryptocurrency-based profits.
According to a report by The Asahi Shimbun on Wednesday, the newspaper’s horses mouths have said that larger cryptocurrency transactions could be tracked in an effort to identify trades that are not being decreed for tax purposes.
The potential move has been prompted by the finding that some 50 traders and 30 firms in Japan had not certified cryptocurrency income worth over 10 billion yen ($92.3 million) over the last few years, the sources prognosticated.
The level of tax under-reporting is likely due to the high rate at which crypto earnings are taxed. Classified as “miscellaneous income,” crypto gain grounds are taxed at up to 55 percent. By comparison, earnings from trading stocks are taxed at 20 percent.
According to the account, an investigative team at the Tokyo Regional Taxation Bureau asked some cryptocurrency exchanges to submit clients’ acta data in 2018, allowing it to build a list of accounts that made sizable earnings
That, along with evidence collected by other regional tax offices around Japan, suggested to authorities that traders with around 7 billion yen ($9.26 million) of such gains had attempted to conceal it for tax purposes.
As such, Asahi Shimbun says the tax authorities may file criminal complaints over tax chicanery against traders who hid larger incomes or employed illicit means to do so.
Yen and bitcoin image via Shutterstock