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Japan bitcoin a currency but still taxable

  • Mar 8, 2016 | Richard Asquith

Japan bitcoin a currency but still taxable

Japan’s government has recognized bitcoin as a private currency. The new categorization switches it from a simple asset to means of exchange of goods or services without any intrinsic value.

This means all digital currencies will come under the supervision of the Japanese Financial Services Agency, giving added consumer protection and transparency around bitcoin exchanges. This will potentially require independent audits and capital buffers for all exchanges.

Bitcoin liable to 8% Japanese Consumption Tax

However, digital currencies will continue to be classified as a tradable asset for taxation, and therefore subject to full Japanese Consumption Tax at 8%. This is in line with the treatment in Australia, which levies its 10% GST on sales of bitcoins.

However, the European Union recently confirmed bitcoin supplies were exempt from VAT. Other regions, such as Singapore and New York, have also categorized bitcoins as being exempt from consumption taxes.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.