Source: umaruchan4678/Adobe 
The <a href="https://cryptonews.com/news/osaka-digital-exchange-to-launch-trading-of-japans-first-digital-securities-on-december-25.htm">Japanese</a> National Tax Agency (NTA) has revealed it has recently investigated hundreds of <a href="https://cryptonews.com/news/major-japanese-businesses-ask-govt-reform-crypto-tax-system-1.htm">crypto tax</a> violations. 
The <a href="https://www.nta.go.jp/information/release/kokuzeicho/2023/shotoku_shohi/pdf/shotoku_shohi.pdf" target="_blank" rel="noopener">NTA released its annual report</a> on tax investigations ahead of the weekend, including a section on crypto taxation. 
The data in the report, and also reported by Japan’s <a href="https://coinpost.jp/?p=493857" target="_blank" rel="noopener">CoinPost</a>, shows that the agency launched 615 investigations into Japanese residents’ crypto holdings in the financial year 2022. 
The NTA noted that it had found tax violations in 548 cases, marking a significant rise from the previous financial year. 
In FY2021, the NTA launched 444 crypto-related investigations, uncovering 405 violations. 
But there appears to have been a drop in the value of crypto-related tax violations, possibly reflecting a fall in global crypto prices. 
NTA added that the average value of undeclared income in crypto-related cases was around $206,000 per case in FY2022, down from $245,000 in FY2021. 
The cumulative value of the undeclared income for FY2022 was $126.5 million, up from over $110 million. 
 Japan May Become ‘Crypto El Dorado’ – South Korean Experts 
Japan is aiming to become a crypto and Web3 “powerhouse,” South Korean analysts and experts believe – but some think Seoul still has what it takes to surpass Tokyo.<a href="https://twitter.com/hashtag/CryptoNews?src=hash&amp;ref_src=twsrc%5Etfw">#CryptoNews</a> <a href="https://twitter.com/hashtag/Japan?src=hash&amp;ref_src=twsrc%5Etfw">#Japan</a><a href="https://t.co/M8UqL9Q6yR">https://t.co/M8UqL9Q6yR</a> 
— Cryptonews.com (@cryptonews) <a href="https://twitter.com/cryptonews/status/1709487665169535474?ref_src=twsrc%5Etfw">October 4, 2023</a> 
<h2 id="why-are-japan-s-crypto-related-tax-violations-on-the-rise">Why Are Japan’s Crypto-related Tax Violations on the Rise?</h2> 
 On X, the Japanese crypto analyst <a href="https://twitter.com/Jeanscpa/status/1727270239535353901" target="_blank" rel="noopener">Jeanscpa</a>&nbsp;claimed that the rise in violations was partly due to an increase in NTA investigations in FY2022. 
The analyst noted that the NTA “increased its number of investigations” into suspected crypto irregularities by “approximately 1.4 times compared to the previous year.” 
Jeanscpa claimed that the discrepancy was “due to the coronavirus pandemic.” 
The pandemic allegedly saw the NTA slow the rate of its probes, and focus on higher-income individuals. 
The analyst claimed that “the number of tax audits” into crypto holders would “be similar” in 2023 “or even higher than [FY2022].” 
The Japanese crypto community has repeatedly asked the government to reform the tax system. 
Many critics, including politicians and business leaders, claim the current system is unfair. 
Crypto is taxed as “other income” in Japan, while in other countries coin-related profits are taxed via capital gains levies. 
In other nations, crypto holders’ profits are only taxable when they trade their coins for fiat. 
Some<a href="https://cryptonews.com/exclusives/politician-challenges-japanese-gov-t-on-crypto-tax-rate-urge-6230.htm"> lawmakers have tried to convince Tokyo that taxes on crypto are currently “too high,”</a> but have thus far failed to sway the government. 
<a href="https://cryptonews.com/news/japanese-opposition-leader-urges-crypto-tax-reform-provide-nation-with-web3-boost.htm">Corporations and political leaders claim</a> the system discourages firms from holding coins by taxing unrealized income. 
<a href="https://cryptonews.com/news/japans-prime-minister-reportedly-open-idea-of-crypto-tax-reform.htm">Tokyo has effectively agreed to reform the law for firms</a>, but has thus far refused to consider changing the way it taxes individuals.

Japanese Tax Agency Investigates Hundreds of Crypto Tax Violations

Table of Contents

Cryptonews.com

Other articles published on Nov 27, 2023

Weekly Cryptocurrency Analysis: Altcoins Continue Their Uptrend

Cryptocurrency Wallet Security: Best Practices and Guidelines

LUNC Soars to 3-Month High Post USTC’s Explosive Rally

Bitcoin's Yearly Highs and Spot Premium: A Nuanced Market Outlook

Cosmos Hub Approves Proposal for Capping ATOM Inflation Rate to 10%

Crypto Market Stunned by Binance Case Developments and CZ’s U.S. Presence

Join our free newsletter for daily crypto updates!