TL;DR Breakdown
- Japan’s National Tax Agency(NTA) has announced updating its crypto FAQs to include staking and lending.
- The Agency did not include airdrops and NFTs, signifying that it does not consider them viable for taxation.
Japan’s NTA updated the crypto FAQs on DEC.22,2021, to include staking and lending. This body controls the crypto regulations in the country through taxation. However, it did not address NFTs and airdrops yet.
Japan tightens crypto regulations for staking and lending
Japan’s NTA updated its crypto FAQs to include the profits from staking and lending. It noted that Japanese citizens should consider the purchase price of the coins involved when doing tax calculations. Moreover, they asked investors to calculate and pay the tax in Yen.
The new FAQs also dictate that similar crypto mining rules apply to staking and lending. The Agency classifies mining as the acquisition of cryptos. Therefore the miners should pay the taxes as soon as they receive their loot. Additionally, the Agency also requires the miners to declare profits made in case of selling the mined coins at a higher price than at the time of acquisition.
Similarly, the Agency needs investors to declare and keep records of when they stake or lend money through crypto platforms. Once the lending and staking contract is over, the investor must declare the profits ( sale price – purchase price) then continue with taxation.
Moreover, the Agency warned that investors who fail to record live prices might encounter difficulties later. It also said that since staking and lending are done through crypto platforms, an investor can retrieve the records there.
However, it also warned that people should not retrieve data from these platforms since they may crash.
Japan tightens crypto regulations again while other countries are getting started
Japan is among the few countries globally with a working crypto regulation framework. It has been improving its legislation on these assets frequently. Earlier this month, Japan’s FSA proposed new regulations for Stablecoins. The country is keen on these assets to safeguard its citizens from possible risks.
Other countries are also building their crypto regulation frameworks. However, no country can brag about having a fully functional framework, not even China which supposedly does not need one. In September, the government banned all cryptos and even apprehended those against the law.
Apart from China, other big economies like Russia and the US are currently drafting their crypto regulations. Yesterday, Russian lawmakers and other officials met in the State Duma to discuss crypto regulations. Russia seeks to allow cryptos to trade in a regulated manner, but some officials want them banned.
The US is also dawning on cryptocurrency even though it still does not have a regulatory framework. However, it plans to begin with Stablecoins since most lawmakers believe they are a threat to the economy.
