In Japan, bitcoin can be taxed at more than 100%, making ownership and sale highly unprofitable.
High Taxes on Bitcoin in Japan
In Japan, bitcoin and other cryptocurrencies can be taxed at rates higher than the assets themselves are worth. According to a report by Nikkei, the rate of taxation can reach up to 110%, causing concern among cryptocurrency holders and advocates.
Government's Position and Possible Consequences
Despite efforts by some Japanese politicians like Democratic Party leader Yuichiro Tamaki to introduce a separate 20% tax rate for cryptocurrencies, the government shows little interest in changing the current system. The new Prime Minister, Shigeru Ishiba, doubts the legitimacy of bitcoin as an asset, which does not bode well for tax reform.
Example of Taxation in Practice
A new report from Nikkei provides an example where cryptocurrency heirs could be taxed at rates exceeding the value of the assets received. If an individual purchased 100 BTC in 2014, with its value increasing by 2024, the heir would face taxes potentially exceeding 100% of the initial asset value.
Cryptocurrency taxes in Japan are becoming a significant issue for holders, necessitating attention and possible legislative changes.
