Japan bitcoin a currency but still taxable
- Consumption Tax
- 09 March 2016 | Richard Asquith
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.