Japanese residents who make significant profits from crypto trading and refuse to pay the relevant taxes are the targets of a new system that will be introduced in 2020 by the government.
A local news source, Mainichi reported the new development on Tuesday, December 4, and revealed that the National Tax Agency (NTA) is not ignorant of the fact that crypto tax payments being received are not on the same level with money made by traders and investors.
To solve this problem, Japan is going to release a system that will allow the NTA to collect information from the transaction intermediaries or crypto exchanges used by suspected tax evaders. The regulators can collect information ranging from customer names, addresses, and the 12-digit national identification number.
The unnamed sources also stated that the NTA does not plan to collect data from the exchanges about all their users. Instead, the focus will be on individuals who have earned as much as 10 million Japanese yen (app. $88,000) from crypto trading and failed to report at least 50% of that income.
Reforming Existing System To Maximize Crypto Tax Revenue
As mentioned in the report, the new system was influenced by a recent survey conducted by the NTA, which noted that over 300 Japanese residents made as much as 100 million yen ($885,880) during the meteoric Bitcoin rise of 2017. It is evident that the agency did not receive all tax revenues in the aftermath of the increase and wanted to reduce the chances of that happening again.
Existing task laws in Japan states that salaried workers who make as much as 200,000 yen ($1172) from crypto investments are to report it as income. However, it did not allow the NTA to collect customer information from the crypto intermediaries but gave the entities the opportunity to choose whether or not to disclose the information.
With the new adjustment, the power to expressly collect customer information will be returned to the National Tax Agency while the exchanges will only be allowed to file an appeal in a case where they do not want to disclose the information.
The new system will be introduced in Japan sometime after April 2020 according to the report.