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The Japan Virtual Currency Exchange Association (JVCEA), the country's self-regulatory crypto exchange body, recently sent a letter to authorities to demand tax reforms. The association basically feels that, while regulations have progressed, tax laws remain woefully behind.
In the document sent to the Financial Services Agency (FSA), the JVCEA is making certain demands with regards to how taxes on cryptocurrency and crypto traders should be done. In particular, it wants changes that coincide with the fact that crypto coins are now recognized as bona fide financial assets, Cryptonews reports. This is why the association is asking for the following reforms:
- Citizens who must pay tax on their cryptocurrency holdings should be granted a three-year grace period to obtain necessary documentation/registration information (before fines become applicable).
- Cryptocurrency derivative transactions should be taxed separately, and the transfer of losses should be allowed.
- Small-scale cryptocurrency transactions should not be subject to taxation.
- Cryptocurrency issuance from initial coin offerings (ICOs) should be recognized as a capital transaction rather than taxable income.
- Special tax laws and tax breaks should be introduced for certain investment deals involving cryptocurrency projects.
This demand for tax reform is particularly timely since crypto enthusiasts recently lost an ally when Takesi Fujimaki lost his seat in the House of Councilors. Fujimaki was one of the most influential figures in Japan pushing for changes in the way that crypto coins are taxed.
The JVCEA also recently received another blow when SBI Group CEO Yoshitaka Kitao and former president of the association resigned. This development holds the potential to impact the standing of the crypto body and its influence on tax reform decisions.
The group hopes that, much like in the U.S. where the Internal Revenue Service (IRS) is already working on updating its tax guidelines pertaining to cryptocurrency, Japan will do the same. As of now, the JVCEA can only keep pushing for such an outcome.
