Japan government officially eliminates bitcoin taxation after it recognized as legal method of payment a few months ago.
Consumption taxes on the sale of bitcoin will come into effect on July 1st.
According to a Deloitte’s report entitled “Japan: Inbound Tax Alert, 2017 Tax Reform Proposals,” digital currencies including Bitcoin will be exempt from the 8% consumption tax in Japan.
Deloitte’s report explains:
“The supply of virtual currency will be exempt from Japanese Consumption Tax (“JCT”). Currently, virtual currencies such as Bitcoin do not fall under the category of exempt sales, and as a result, the sale of virtual currencies in Japan have been treated as taxable for JCT purposes. Following the enactment of the amended Fund Settlement Law in May 2016, which newly defined “virtual currency” as a means of settlement, the sale of virtual currency as defined under the new Fund Settlement Law will be exempt from JCT. This change will apply to sales/purchase transactions performed in Japan on or after 1 July 2017.”
Back in March, the Japanese National Diet approved the tax reform proposed by Deloitte. The bill, which came into effect on July 1st will drastically increase bitcoin and cryptocurrency trading activities within the Japanese digital currency exchanges.
The bill will probably increase bitcoin and cryptocurrency trading activities within the Japanese digital currency exchanges.
On April 1, the Japanese government officially recognized Bitcoin as a legal payment method and currency.
The Japanese Bitcoin exchange industry is well regulated with Know Your Customer (KYC) and Anti-Money Laundering (AML) systems. AML policies are very strict in Japan and South Korea, and it is difficult for traders to take advantage of utilizing digital currencies to move large amounts outside of Japan.
Although it could be a coincidence- since Japan has proposed the end of Bitcoin taxation, Bitcoin price increased from around $2,450 to $2,570.
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