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2019 Japan Individual Income Tax Return - Cryptocurrency Transactions

List of news

1. Introduction
Japan’s Individual Income Tax Return is a procedure for declaring your annual income from January 1 through December 31. Through tax filing, individuals settle their own withholding taxes or prepaid taxes of the year.
In this News, we will mention the tax treatment of gains and losses derived from cryptocurrency which you need to declare on your income tax return.

2. Clarification of calculation method of acquisition costs
Taxable income related to cryptocurrency
 Sale of holding cryptocurrency
- The difference between the sales price and the acquisition cost of cryptocurrency at the time of conducting such transactions 
 Settlement by cryptocurrency when purchasing goods 
- The difference between the price of goods and the acquisition cost of cryptocurrency at the time of using such cryptocurrency
In case purchasing the same cryptocurrency more than once, the acquisition cost of such cryptocurrency is evaluated by either the moving average method or the gross average method (statutory method). In addition, cryptocurrency is excluded from the scope of inventories.

3. Effective date
The above tax reform will be effective for income tax on or after 2019. As transitional measures of the evaluation method, in case individuals own cryptocurrency at the date of April 1, 2019, it is treated that such cryptocurrency is acquired on the same date. 

4. Conclusion
We mentioned the amended points of “2019 Individual Income Tax Return -Cryptocurrency Transactions.” 
Please note that this News only introduces general outlines and does not include professional advice. So please make sure not to make any decisions without taking professional advice individually. If you have any questions, please feel free to contact us.

(Reference / Japanese)
・National Tax Agency  Q&A Tax Treatment Regarding Cryptocurrency Transactions
(December, 2019) (Japanese)