What is the tax on crypto assets (virtual currency) such as Bitcoin (BTC)?

Even if you know the word tax return, you may not know what to do specifically? If you get a certain amount of profit from trading crypto assets such as Bitcoin (BTC) (virtual currency), you need to file a tax return. Then, what kind of mechanism is tax return? Regarding the tax return, let’s look at the mechanism, the presence or absence of tax return when profiting from crypto asset (virtual currency) transactions, and the tax calculation method.

Bitcoin (BTC) transactions and tax

Then, is it necessary to file a tax return if there is a profit from trading in crypto assets (virtual currency) such as Bitcoin (BTC)? And what penalties are there if you do not file a tax return?

If I make a profit from crypto asset (virtual currency) transactions such as Bitcoin (BTC), do I need to file a tax return?

If profits are generated from cryptocurrency (virtual currency) transactions such as Bitcoin (BTC), if the profit exceeds a certain level, you must file a tax return.

Company employee with salary income: A tax return is required if a profit of more than 200,000 yen is generated annually in the transaction of crypto assets (virtual currency) such as Bitcoin (BTC).

Person who does not have salary income: A tax return is required if the total amount of income generated by crypto assets (virtual currency) such as Bitcoin (BTC) and income other than salary income and retirement income exceeds 380,000 yen.

What happens if I do not file a tax return?

If a company employee with salary earns over 200,000 yen in Bitcoin (BTC) transactions, it will be necessary to file a tax return, but if the tax return is not filed, the following penalties will apply. You may be charged. Please note that these taxes will be determined by the tax authorities. You can earn more money by using popular online crypto trading website: Crypto Superstar.

Overdue tax: If tax is not paid by the set deadline, interest will be accrued according to the number of days from the day after the tax deadline until the tax is paid.

Non-declared additional tax: If you do not submit the tax return by the due date, there will be taxes to be paid in addition to the taxes to be paid. The undeclared additional tax depends on the tax amount to be paid. Up to 500,000 yen will be 15%, and if it exceeds 500,000 yen, it will be calculated by multiplying the excess by 20%.

Even if you forget to file your tax return within the deadline, you may be able to file your tax return at a later date. This is called a “declaration after deadline” and if you file before the tax office’s investigation, 5% of the undeclared additional tax will be reduced.

How to calculate taxes on profits from Bitcoin (BTC) transactions

In principle, profits generated by trading crypto assets (virtual currencies) such as Bitcoin (BTC) are classified as “Miscellaneous income”. For miscellaneous income, the “progressive taxation system” is applied in which the tax rate applied increases as income increases. Let’s look at the calculation method of income tax under the progressive taxation system along with a concrete example.

Is Bitcoin coming from the exchange late?

Even if you transfer money from the exchange to Bitcoin or other virtual currencies, it is often not immediately reflected in your wallet. Bitcoin, for example, may not arrive in half a day or even a day. Bitcoin itself has a problem with the block size of the blockchain, so processing speed is slow and fees are high.

Money transfers from exchanges such as Bit Flyer and Coin Check must be confirmed. Is the person sending money? After confirming such things, you may receive an email.

Therefore, if the confirmation work takes time or if there is a suspicious money transfer instruction, the money will not be sent. This is a security concern. Rather, I’m in trouble.

In the past, I used a remote desktop to connect a computer to a friend’s computer that I do not know the operation, and proceeded from the coin check to the remittance procedure.