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Japan is getting serious about its crackdown on crypto traders who do not properly file their tax declarations on cryptocurrency-related income. One offender was recently fined and sentenced to a year in prison for not accurately declaring his Bitcoin activity.
Hideji Matsuda, a 52-year old office worker in Ishikawa, was given a one-year sentence and fined over 22 million yen (around $200,000) by a judge at the Kanazawa District Court for violating the Income Tax Law, according to Bitcoin.com. The judge ruled that Matsuda did not file accurate tax declarations knowingly for his bitcoin (BTC) trading activities for a two–year period. Court documents revealed that Matsuda did not declare his Bitcoin trading activities for the period 2017-2018.
The court also ruled that Matsuda falsified data on tax submissions by claiming that he just earned 1.2 million yen (around $11,000) in Bitcoin trading profits. However, his total income was actually 74 million yen ($678,000), which he did not pay any tax.
When quizzed by lawyers, he claimed that he is not very clear on how to calculate taxes for income from crypts. “I still don't understand how to calculate [tax] on profits earned from [trading] cryptocurrencies,” according to Cryptonews.com. Matsuda told the court. However, prosecutors believed otherwise and said that he was “selfish and self-centered.”
His lawyers tried to have the court pardon Matsuda and said that he already submitted petitions to amend the tax filings to reflect the accurate amount. However, the judge rejected the proposal.
The legal proceedings of the case, which is also the first of its kind in Japan, started in 2020. With the ruling, Matsuda became the first person sentenced for evading Bitcoin taxes.
Japan imposes one of the highest tax rates in the world for crypto-related activities. Taxes for crypto trading, mining, and lending could go as high as 55 percent.
