Changes in tax matters would help boost the cryptocurrency business and establish a clear framework in all legal senses
Japan has become the first country in the world in which cryptocurrencies have been regulated. But recently, some companies dedicated to the exploitation of crypto assets, in institutions linked to the crypto world have demanded to the government the modification in tax policies around digital currencies.
In the country, the cryptographic environment is regulated. This regulation was first conducted between 2014 and 2015, with the establishment of a special working group that would be responsible for the “sophistication of payment and settlement operations”, in the Financial Services Agency (FSA).
The group was responsible for conducting an investigation of cryptocurrencies. In the final report, the working group establishes an introduction of a registration system, where data from transactions made with cryptocurrencies would be stored, so that the industry is regulated by the laws against money laundering and other crimes. The group also considered that a system should have been added to protect users from cryptocurrencies.
After these modifications, the government decided to propose a bill that would help change the Payment Services law. This amendment established cryptocurrencies in Japan’s financial markets. In addition, it opened a field so that it could be understood how these currencies are used in international markets.
For this reason, the Japan Virtual Currency Exchange Association (JVCEA) drafted a request to the government of the country to make some changes in tax matters, this in order to improve its processes.
The requirements are clear. According to the letter sent by the JVCEA, the laws regarding the topic of cryptocurrencies are in accordance with the times and needs of the sector. However, in tax matters it is something else. The JVCEA requests an immediate update to the entire tax legal system.
To go into detail about the requirements for changes in tax matters, the JVCEA sent a petition document to the FSA, in order to demand that the taxes are applied both to cryptocurrencies and merchants dedicated to the crypto industry. The JVCEA explained that cryptocurrencies are considered legal and safe financial assets, emphasizing that they deserve a treatment like the one given to fiat money.
The country has some requirements to treat cryptocurrencies. It is known that among some of the requirements for tax changes are:
1. Small-scale cryptocurrency transactions should not be required to pay taxes.
2. Transactions made with cryptocurrencies must be recorded separately.
3. The issuance of ICOs should be considered as a capital transaction instead of being considered a taxable income.
4. Citizens who will be asked for taxes for the possession of cryptocurrencies should have time to manage their documentation.
These requirements made by the JVCEA will be considered as a set of measures that will help boost the crypto industry in the Asian country, in addition to improving national and foreign investment in cryptocurrency businesses. The idea is to get a clear regulation as much as possible.
By María Rodríguez
