The Japanese cryptocurrency investors will pay a capital gains tax between 15 and 55% of their crypto profits this year. This news was communicated by Bloomberg earlier this month.
The National Tax Agency of Japan last year decided to treat the capital gains on the virtual currency transactions as miscellaneous income.
The capital gains tax on cryptocurrency profits is higher than the 20% capital gains tax on profits from stocks and foreign currencies and lower than the tax applied to the people who earn more than 40 million yens (around 367,000 US dollars) per year.
South Korea, on the other hand, announced a new tax for the cryptocurrency exchanges in January. The cryptocurrency exchanges in the country need to pay 24.2% of their profits, in line with the existing tax policy for corporations.
According to Bloomberg, almost 40% of the recent bitcoin trading went against the Japanese yen, which means the country will a large revenue from the new cryptocurrency tax.
Bloomberg reports that the Japanese National Tax Agency is creating a database of cryptocurrency investors. The database should potentially ensure the tax laws are enforced and keep the team in Tokyo and Osaka to supervise electronic trading.
The tax authority of the United States, the Internal Revenue Service (IRS) announced the creation of a research team comprised of 10 people. The research team has the objective to track down people who did not declare their profit from cryptocurrencies in their tax declarations.
Japan recognized bitcoin as a legal method of payment in April last year, which was a step towards helping the government to protect the cryptocurrency exchanges from hacks and mismanagement, such as in the case of Mt. Gox back in 2014.