It’s no secret that investors are looking for another bull run just like what the crypto market experienced last year. Crypto experts such as Tom Lee and John McAfee have high hopes that the crypto market is going to repeat its performance from last year and even surpass the all-time high soon.
Imagine Bitcoin starting at around $1,000 in 2017 only to reach up to $20,000 by mid-December. And though there are stories of investors losing a significant amount of money especially during the early months of 2018, and even committed suicide, there are those who generated profits from crypto trading.
Japanese cryptocurrency sector recorded 331 investors that have recorded a profit of $1 million. According to the National Tax Agency, 21.98 million in Japan declared taxes in Japan and was able to generate 41.4 billion yen. It was revealed that the generated tax in 2017 was 3{4ede17fdd9b4ce8121d01fc4b54913fe84f8215aace504cc657695cefb5329ff} much higher than the tax they collected in 2016. This is mainly due to the improved economy in the country.
Of the 549 individuals who filed their non-operational or non-working profit of $1 million, which is often times coming from investments such as stocks and assets, 331 were crypto investors. This means that around 50{4ede17fdd9b4ce8121d01fc4b54913fe84f8215aace504cc657695cefb5329ff} of people who earned $1 million from their investment were actually crypto investors.
Virtual currencies brought good news to Japan. It has economy has stagnated for the last two decades and it seemed that virtual currencies have helped the country tremendously.
However, considering the fact that the crypto market is still a bit young, there are still things that need to be clarified. According to Hiroyuki Komiya, “The government hasn’t clarified certain details, so you’re left unsure whether you’ve got it right or not”.
Too Few?
If you will look at the current state of crypto taxation in the US, local finance authorities and tax agencies have challenged companies such as Coinbase in order to encourage its investors to pay taxes. As for Japan, NTA remains optimistic that people investors are going to come forward with their voluntary tax declaration. However, as for experts, there are those who believe that the numbers are quite low and many still opted not to declare their earnings.
According to one analyst, “if the rapid growth of the cryptocurrency sector in late 2017 is considered, 331 is a number that is too low to be true. A large portion of cryptocurrency investors probably did not declare their earnings to the government”.
South Korea is Next
South Korean government made steps towards stricter crypto rules. The government banned local investors from investing in ICOs in order to “minimize risk”. However, South Korean government changed its mind and stated that it would legalize domestic ICOs as long as there’s a proper taxation policy that has been drafted.
Japan is quite open to cryptocurrencies. However, we can expect that Japan could take possible steps towards making stricter tax laws in order to maximize the government’s profits from crypto investors. In fact, countries such as Spain already started its crackdown on crypto investors including 60 companies, 16 of which as even large banks. The reason behind these changes is mostly to avoid money laundering and tax evasion.
