Effective July 15th, 2018, the National Tax Agency (NTA) in Japan has put in place a policy requiring all individuals who earned more than $1,800 in cryptos to make a tax declaration to that effect.
The NTA along with the Financial Service Agency and other agencies involved in the regulation of cryptocurrencies in the country teamed up to launch the software that automatically calculates profits made on selling virtual currencies and the corresponding taxes due from such profits. The move intends to promote an environment where people and companies are easily able to declare the gains they make on cryptocurrency trades.
The software is said to be very useful to companies and individuals as it quickly calculates profits and losses made in trading cryptocurrencies thereby making tax payments easier. The NTA is urging all companies to use the software, insisting on the fact that the complicated tax payment system that was previously in place has now been improved.
Earlier in April this year, study sessions were launched by the NTA, the FSA and Japan Blockchain Association intended to seek opinions on cryptocurrency tax filing systems. Even though the sessions will continue to the end of 2018, the NTA determined that it was important to launch such software after only a few sittings of the consultative forums.
The agency had determined that the different methods employed by each crypto exchange in recording and storing transaction history data were the stumbling blocks for calculating profits on cryptocurrency sales. The agency says the discrepancies also made it difficult to track fraud and distortions in tax returns.
The tax agency is hopeful that the launch of the software that automatically calculates profits and corresponding taxes due on crypto sales will finally take care of the cumbersome tax filing systems that were previously in place.