Japanese Tax Agency Investigates Hundreds of Crypto Tax Violations
The Japanese National Tax Agency (NTA) is reportedly probing hundreds of cryptocurrency tax violations prior to the country’s first tax on crypto profits.
The NTA began a year-long, nationwide survey of domestic digital currency owners in September 2018, shortly after Japan’s financial regulator, the Financial Services Agency, implemented new laws requiring crypto exchanges to register with the organization in order to legally operate.
According to a source close to the NTA audit, investigators have inspected over 300 individual accounts between late April and early May. This is believed to be part of a larger operation that has been running since January and is expected to reach as many as 700 digital currency users.
The NTA, which is in charge of collecting taxes in the country, has found that many virtual currency owners are not accurately reporting the amount of income they generate from their investments.
Some are reportedly under-reporting while others are falsely claiming that their earnings are zero and that they don’t owe any taxes.
In order to combat these practices, the tax agency is using big data analytics to scrutinize digital asset activities. They’re also expected to impose hefty fines or jail time to those found guilty of tax evasion or fraud.
The NTA’s survey ultimately aims to increase compliance ahead of crypto taxation, which is scheduled to come into force next year. Under the new framework, traders and investors who report their digital currency profits will have to pay up to 55% in taxes.