According to the Japanese National Tax Agency (NTA), that organization is completely aware that in the past twelve months, 331 individuals earned profits of at least $1 million from investing in cryptocurrency. It remains to be seen how much the NTA will claim as their share.
According to mainstream media outlets in South Korea and Japan, the National Tax Agency (NTA) of Japan is completely aware that during 2017, 331 cryptocurrency investors recorded a profit of $1 million or more through trading on such coins as Bitcoin, Ethereum and Litecoin.
The NTA’s report stated that by the end of 2017, 21,980,000 people in Japan (Japan’s total population is 127 million) presented their taxes to the government, potentially generating tax revenue of 41.4 billion yen ($380,755,800.00). The NTA also revealed that last year’s tax revenue increased by more than 3%, a sign of an improvement in the Japanese economy that could be attributed to its vibrant cryptocurrency market.
549 people posted recorded a non-working profit of $1 million, usually the result of traditional investments (stocks and shares, commodities, real estate). 331 were cryptocurrency investors that made at least $1 million in profit.
Possible 55% Tax On Crypto Profits
In 2017, the NTA announced that non-operational profit generated by investments would be taxed by up to 55%, and that may include profits from cryptocurrency investments. In February of this year, Bloomberg reported that the Japanese government were considering imposing a 55% tax on cryptocurrency investment, especially on those individuals who have earned over 40 million yen ($365,000).
This would unfortunately stifle a growing market that has been bolstered by the continuing restrictions on crypto trading imposed by the authorities in nearby China and South Korea. As a result, Bitcoin investors from those nations have turned to Japan – and Japanese investors – to do business.
Bitcoin (And Crypto) Is Big In Japan
The term “Big in Japan” has been used to bolster the reputation of dozens of struggling rock bands over the decades. A band might have poor sales in the US and Europe, but they can still say they are “Big in Japan”, often indicated by said band releasing a live album from a concert at the Budokan if front of thousands of adoring Japanese fans.
Right now, the term “Big in Japan” can be applied to the cryptocurrency market, Bitcoin in particular. Thanks to a law passed in Japan last February, Bitcoin is recognized as legal tender in Japan, one of the few nations on earth to have taken such a step. Several well-known Japanese businesses have started accepting payment in Bitcoin, while one firm company made headlines when it stated it would pay part of its employees’ wages in Bitcoin if they wanted.
While the regulators in regional neighbors China and South Korea have severely restricted cryptocurrency trading, Japan has virtually welcomed it with open arms.
Traditional Japanese investors have taken to Bitcoin in a way that the US can only hope its institutional investors might one day do. For example, in December 2017, almost one third of global Bitcoin transactions were made in Yen, leading many analysts to speculate that it was in fact the Japanese market that pushed the price of Bitcoin up to a record $19,990 earlier that month.
However, nothing can kill a fashionable and profitable investment quicker than over-taxation, and if the Japanese government goes ahead and hits the crypto-investment market with a 55% tax rate, it will undoubtedly sap much of the enthusiasm the Japanese people currently have for putting their Yen into crypto.