Japan-based entities have failed to report their crypto gains valued at 10 billion yen ($93 million) over the past several years by March 2019, local national newspaper Asahi Shimbun reports on June 5.
According to Asahi, about 30 crypto-related businesses and 50 individuals have not declared their revenues from cryptocurrency trading as of March, allegedly due to a high tax on this type of income.
To date, Japanese tax regulators reportedly consider crypto-related revenues as miscellaneous income, which is taxed at 55%. In accordance with the current law, local entities who earn more than 200,000 yen ($1,850) in such income on an annual basis are required to disclose it, the article notes.
As previously reported, in order to combat tax evasion in the industry, the Japanese government is preparing a new system that will authorize the National Tax Agency (NTA) to request revenue information from crypto exchanges, including names and addresses. Expected to be introduced in April 2020, the new law will allow the NTA to request data primarily for those users whose earnings from crypto amounted to more than 10 million yen ($88,700).
Asahi adds that the new system will be launched in January 2020, and it will also authorize the Japanese government to penalize those exchanges or crypto operators who fail to disclose the necessary information.
Earlier this year, the Japan Association of New Economy (JANE) asked the Japanese Financial Services Agency (FSA) to consider reducing crypto taxes from the current 55% to 20%. The association has also asked the regulator to impose no taxation for crypto-to-crypto transactions.
Meanwhile, Japan, which is reportedly ranked as the second country globally for traffic to crypto exchanges after the United States, has recently passed new crypto regulation in the upper house of the parliament. The lower house suggested legal amendments intending to tighten local regulations on cryptocurrency trading activity, including margin trading.