Japan’s tax authorities estimate that the average value of undisclosed cryptocurrency income fell by 19% in 2022, while the number of tax evasion cases featuring crypto assets rose by 35% in the same year.
The Japanese National Tax Agency (NTA) published its annual summary of tax investigations on November 24. The thirteen-page document also includes information regarding the investigation into cryptocurrency tax evasion.
Based on tax returns for 2022, the NTA initiated 615 investigations into the cryptocurrency holdings of citizens, an increase from 444 in 2021. The agency discovered tax violations in 548 cases, a 35% increase from 2021 when it discovered 405 instances of cryptocurrency tax evasion.
Conversely, between 2021 and 2022, the mean value of undisclosed cryptocurrency holdings decreased from 36,590,000 Japanese yen (approximately $245,000) to 30,770,000 yen ($206,000).
In August, regulators in Japan, including the NTA and the Financial Services Agency (FSA), verified that unrealized cryptocurrency gains would not be subject to capital gains tax for Japanese citizens. This entails an exemption of approximately 35% in taxes on crypto assets without any trade operations throughout the fiscal year.
This month, Japan commenced “rapidly transposing” the Crypto-Asset Reporting Framework, a new international standard governing the automated exchange of information between tax authorities, into its domestic legal systems, joining nearly fifty other nations in this undertaking.
