2 months ago 1 min read

Japan Begins Taxing NFT with Regulations That are Transparent


Guidelines for the taxation of NFT transactions, such as blockchain games, were published by the National Tax Agency of Japan and covered income tax, consumption tax, etc.

In relation to NFT, the Japanese National Tax Agency published a general tax treatment paper. The book also included cases of consumption tax and other conditions in addition to outlining the cases of vying for income tax on NFT. Because they are obtained and used frequently and are challenging to assess, in-game tokens will be evenly calculated at the end of the year.

The rules say that the profit is "income taxable" and subject to tax whether an individual generates an NFT and sells it to a third party (a primary distribution) or if the person who purchased the NFT resells it to another person (a secondary distribution).

If one individual gives a free NFT to a friend, the friend may be subject to taxation even while the giver may not. The creator of an NFT will be charged consumption tax when they sell it to Japanese customers on the open market in order to be paid. Additionally, if the purchased NFT is sold to someone else through a Japanese operator for money, the operator will be charged consumption tax as part of the secondary circulation.

In theory, winnings from blockchain games are regarded as "miscellaneous income" and are therefore taxed as such. However, they are not regarded as taxable articles of income tax if the in-game tokens received as rewards can only be utilized in the game.

Additionally, the previously ambiguous "cases where NFTs are stolen or gone owing to improper access" have been addressed in terms of how the tax law should be handled on a moral basis.

The FAQ only addresses general processing, so it is important to pay attention to specific problems that will be handled on an individual basis. As a result, it is essential to consult professionals and the National Tax Service while deciding the declaration's comprehensive calculation process.

Great! You’ve successfully signed up.
Welcome back! You've successfully signed in.
You've successfully subscribed to Coin Aquarium.
Your link has expired.
Success! Check your email for magic link to sign-in.
Success! Your billing info has been updated.
Your billing was not updated.