How Bitcoin is tax-free! Cryptocurrency tax commentary | We are new to stocks!

"Does Bitcoin cost tax? It's money on the Internet, and it's not money operated by a public institution, so it doesn't cost tax, right?"

That's a big mistake. You are obliged to declare the profits you earn from Bitcoin, and you will be taxed firmly.

If you do not file your tax returns properly, you will be tax evaded, so please be careful!

However, there are cases where you do not need to file a tax return or you can save tax on the profits you earn from Bitcoin. What kind of case is that? This article provides basic information about Bitcoin taxes.

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Bitcoin needs to file a tax return!Declared as miscellaneous income of income tax

Taxes are also levied on the profits of virtual currencies such as Bitcoin.

The value of Bitcoin has increased over the past few years, and it has been attracting attention as a useful asset management method, but the profit (capital gain) obtained by trading Bitcoin must be declared as income tax.

For a detailed explanation of Bitcoin, please refer to "What is Bitcoin! An easy-to-understand explanation of popular virtual currencies".

Also, for how to buy Bitcoin, please read "How to start investing in Bitcoin (virtual currency)! An easy-to-understand explanation of how to buy and buy".

What kind of person needs to file a tax return in the first place?

Who needs to file a tax return?

If the income earned from Bitcoin is 200,000 yen or more, it corresponds to "income other than salary income / retirement income is 200,000 yen or more" and you are obliged to file a tax return.

* Resident tax declaration is required even if the amount is 200,000 yen or less. If you have miscellaneous income of 200,000 yen or less, be sure to file a separate residence tax return at the government office.

The progressive tax rate * of comprehensive taxation is applied to the profits earned with Bitcoin.

* What is the progressive tax rate for comprehensive taxation?

The comprehensive taxation system calculates the amount of income tax by adding up other income. Comprehensive taxation is calculated at a progressive tax rate that increases as the taxable amount increases.

On the other hand, dividends on shares and gains on transfer of shares are called "declaration separate taxation", and taxes can be calculated without adding them to other income.

For more information on gains on transfer of shares and taxes on dividends, please refer to "Absolute tax return if there is a loss on shares! Let's total profit and loss and deduct carry-forward".

Let's declare the income category of profits earned with Bitcoin as "Miscellaneous income *".

* What is miscellaneous income?

Tax on profits that do not fall into any of the nine income categories: interest income, dividend income, real estate income, business income, salary income, retirement income, forest income, capital gains, and temporary income.

The calculation of miscellaneous income is as follows.

Sale price- (acquisition price + transfer cost (commission, etc.)) = miscellaneous income

The amount of miscellaneous income is added to other income such as salary income, the total income amount is calculated, and the "comprehensive taxation" is applied to calculate the tax amount to be paid based on that amount.

Comprehensive taxation ~? Nanisore! In other words, the various applicable income amounts are totaled and the total income deduction is deducted. It will be calculated by multiplying the balance by the tax rate.

Income subject to comprehensive taxation is as follows.

Income subject to comprehensive taxation

Income category	overview
Interest income	Income related to the distribution of profits from deposits and savings, interest on public and corporate bonds, joint investment trusts, investment trusts on public and corporate bonds, and investment trusts on publicly offered public and corporate bonds, etc.
Dividend income	Dividends of profits received by shareholders, distribution of surplus, etc.
Real estate income	Income from real estate such as land and buildings, and loans from ships and aircraft
Business income	Income from businesses such as agriculture, fishing, manufacturing, wholesale and retail
Employment income	Income such as salary and bonus received from the place of employment
Capital gains	Income generated by transferring land, buildings, stocks, golf memberships, gold bullions, etc.
Temporary income	Sweepstakes and Fukubiki prizes, horse racing and bicycle race refunds, life insurance lump sum payments, etc.
Miscellaneous income	Income that does not fall into any of the other income categories

Profit from buying and selling virtual currencies such as Bitcoin is classified as "miscellaneous income" at the bottom.

It means that tax will be applied to the sum of all of these, right? So what is the tax rate after all? Income tax rates are divided into 7 levels from 5% to 45%. It is a "progressive taxation system" that allows high-income people to pay higher taxes!

Bitcoin is miscellaneous income. It is added to the income tax of other income categories and is levied on the total.

Then, at what tax rate will the tax be collected?

The tax rate of income tax is summarized.

Income tax quick calculation table

Taxable income amount	tax rate	Deduction amount
1.95 million yen or less	Five%	0 Yen
195-3.3 million yen	Ten%	97,500 yen
3.3-6.95 million yen	20%	427,500 yen
695-9 million yen	twenty three%	636,000 yen
9-18 million yen	33%	1,536,000 yen
18-40 million yen	40%	2,796,000 yen
40 million yen or more	45%	4,796,000 yen

For example, if the amount of taxable income is 3.5 million yen, the tax rate is 20%.

It is calculated as 3.5 million yen x 20% -427,500 yen (deduction amount) = 272,500 yen (taxable amount).

Income tax rates vary greatly depending on the rank.

It is recommended to trade Bitcoin while grasping "How much is your total income?" Keep in mind that taxes can make a big difference in your profits.

This is a very disappointing news for Bitcoin users.

For Bitcoin and virtual currencies, total profit and loss * is not possible.

* What is total profit and loss?

Real estate income, business income, capital gains, and forest income are tax benefits that can be deducted from profitable items to reduce the taxable amount if there is a calculation loss.

In other words, even if you have a loss on stocks or FX and a profit on virtual currency, you cannot declare it by deducting the profit or loss.

Financial assets such as stocks can receive the benefits of total profit and loss, but virtual currencies such as Bitcoin are miscellaneous income and are not covered.

* Profit and loss between virtual currencies and profit and loss within miscellaneous income can be offset and declared.

In addition, if the loss is deducted from the transfer profit and the loss exceeds, the loss can be carried over for the next 3 years, and the "transfer loss carry-forward deduction" that can be offset and tax-saving with the later profit is not applicable to virtual currencies.

If you make a loss, there is only a thorough "loss", so you need to be very careful about the timing of the loss cut.

Can Bitcoin save taxes? If you don't make a profit, you don't need to file a tax return!

Let's see how to save Bitcoin tax here.

In the first place, is Bitcoin taxable "how"?

The NTA has announced the benefits of Bitcoin in a Tax Answer (questions and answers to the NTA).

Profit generated by using Bitcoin is subject to income tax. (Excerpt from the NTA website)

I contacted the Nakamura Taxation Office in Nagoya City directly for a concrete example of this tax answer.

The cases where Bitcoin is taxable are as follows.

Cases where Bitcoin is taxable

If you convert Bitcoin to Yen, you will be taxed only for the profits you make.

If you convert Bitcoin to dollars, you won't be taxed, right? You will be taxed even if it is not Japanese Yen! For example, if Bitcoin is converted into dollars and profits are made, the amount converted to the Japanese yen rate at that time is taxable.

Those who trade with altcoin (a virtual currency other than Bitcoin) and make a profit are also taxable.

The point is that if you move a virtual currency to another currency, you will need to file a tax return.

Also, the number of stores that can use Bitcoin is increasing. If you shop there, you may be taxed.

See the figure above.

A person who first bought Bitcoin for 10,000 yen and then increased the price to 20,000 yen used Bitcoin with a big camera to shop for 15,000 yen.

Then, you will be taxed on the portion of 5,000 yen that you got from the price increase.

Wow, is this true? You have to keep a record of "where" and "how much" you used Bitcoin! Is true. I checked with the tax office and got a solid answer!

The tax is paid on the profits earned in the virtual currency from January to December of that year.

Taxes are levied on the total amount of profit and loss for one year, so if, for example, a profit of 300,000 yen on exchange A and a loss of 100,000 yen on exchange B, the taxable object is 30-10 = 200,000 yen. Will be.

If one exchange is making a profit while some exchanges are making a loss, it is one of the tax-saving measures to make a profit and offset the profit and loss.

* Please contact us again when filing your tax return, as the views on the above information may change depending on the tax accountant or tax office.

Virtual currencies such as Bitcoin are considered to be "profitable" when converted to Japanese yen, and a final tax return is required.

Therefore, if you simply bought Bitcoin (virtual currency) or have Bitcoin (virtual currency), you do not need to file a tax return and you will not be taxed.

In other words, if you do not make a profit or change it to "money" or "things", you will not be obliged to pay taxes.

Those who bet on the future of Bitcoin and manage their assets over the long term do not have to worry about taxes.

So, shouldn't tax evasion have to be done? Stupid thing. If you get caught, you will be fined up to 5 million yen or imprisoned for up to 5 years. What's more, even if you don't get caught in that year, you will be able to collect late tax as far back as 7 years ago!

I told you that Bitcoin blockchain cannot tamper with transaction information. The transaction history can be traced back indefinitely. It's not fun to live a life that's going to come out someday!

For an explanation of Bitcoin's tamper-proof transaction system and blockchain, please read "What is Bitcoin's mechanism? An easy-to-understand explanation of the system."

If the tax is undeclared, the "undeclared additional tax" will be added to the original tax amount and collected. If it is judged to be malicious, the penalties will be even heavier with the "heavy tax".

If the content of the declaration is small, it will be subject to "underreporting taxation" and "delinquency tax". It is safer to file an accurate tax return than to be frightened by the fear of tax evasion for years to come.

I just hope that cryptocurrencies will become popular and some tax incentives will be given in the future!

Bitcoin will be exempt from consumption tax from 2017!

From July 2017, the consumption tax on buying and selling virtual currencies such as Bitcoin has been exempted.

Previously, Bitcoin was positioned as a "thing" and was subject to consumption tax.

However, it is not worth it for individual investors if the consumption tax is levied every time Bitcoin is bought and sold.

For example, if the consumption tax is applied to the buying and selling of Bitcoin, the consumption tax is 8,000 yen for every 100,000 yen traded. Moreover, if income tax is deducted, the amount of money left on hand will be very small.

Bitcoin has not been developed so far, and there were many uncertainties such as "what happens when it is exchanged at an overseas exchange that is not covered by the Consumption Tax Act".

Even in Europe and the United States, there are few countries where consumption tax is levied on the sale and purchase of Bitcoin, so it can be said that the exemption of consumption tax in Japan is a natural move.

The law on Bitcoin will continue to be put in place. It is thought that an environment where transactions can be carried out safely will be established.

Bitcoin has a lot of price movements, so I'm glad that the assets have increased dramatically, but on the other hand, I have the impression that it is being treated quite coldly in terms of taxes.

If it is a stock, you can also total profit and loss. Therefore, if you want to buy Bitcoin in stocks, you can read "[2017 Edition] Introducing Bitcoin-related stocks of interest!" And make a profit from stocks!

Recommended exchange for buying and selling Bitcoin! bitFlyer

Security is high, so you can rest assured! A trading tool that is easy for both professionals and beginners to use!

After reading this article, you may be interested in buying and selling Bitcoin.

It's not too late now, let's create an account on a reliable exchange.

I would like to recommend bitFlyer, Japan's largest exchange.

BitFlyer uses the latest technology and boasts high security, and it is easy to trade not only on PCs but also on apps, and it is supported by many people.

Female (30s) Rating: ★★★★★

It is attractive to get Bitcoin

Even if you are a beginner, the app is very easy to see and understand.

Deposits and withdrawals are reflected quickly, and I have tried using other similar sites and apps, but now I only use BitFlyer.

It is also attractive that you can get Bitcoin when you use the service via the service, and I use it very often.

Male (40s) Rating: ★★★ ☆☆

A wide variety of types and small investment

The good thing about BitFlyer is that you can buy it from 0.00000001 BTC.

After that, you can get Bitcoin as a reward by shopping at the EC site registered via BitFlyer or registering as a member of the Internet service.

Male (20's) Rating: ★★★★ ☆

Easy to read for beginners

The graph of price fluctuations is easy to understand. The upper limit of the amount of money is also good because you can see the change in red letters and colored letters.

The font is easy to read. We were able to respond to inquiries speedily, and we were able to change the address and registration information.

Since there are news and forecasts about virtual currencies in the news information, I think that even beginners can easily invest while learning about virtual currencies.

If you want Bitcoin or other cryptocurrencies, bitFlyer is recommended!

There are many virtual currencies like Bitcoin that may be several times or tens of times more valuable in the future.

Check out the special article on bitFlyer, "Introducing the reputation of bitFlyer and how to open an account in an easy-to-understand manner!"

\ Ease of use No.1 /

Let's declare the profits earned with Bitcoin accurately!

In this article, I have explained the classification of income tax on profits earned with Bitcoin and the consumption tax of Bitcoin.

Since the consumption tax of Bitcoin has been exempted from July 2017, it may be the same as getting the official endorsement that Bitcoin is not "things" but "money".

Now is the time to invest in the future of virtual currencies such as Bitcoin. The one who embarked on the new world of Bitcoin first wins!

However, make sure to file your tax returns accurately for the profits you make, and be careful not to miss any declarations.

BitFlyer is supported by users not only in Japan but all over the world, and the number of registered users has exceeded 2.5 million! It is used by many people! It's easy to use and easy to use. If you don't have an account yet, take a look at the official website! Coincheck handles not only Bitcoin but also many altcoins. Like Bitcoin, prices may skyrocket in the future? When I think about it, my heart is excited! Coincheck also has the ability to exchange useful information between users via chat! Open an account and get great deals!