As a currency asset that can appreciate in value, taxation on cryptocurrency has long been common. For example, the United States, Russia, India, and other countries have introduced corresponding taxation policies on cryptocurrency.
However, if cryptocurrency is inherited as an inheritance, is inheritance tax required? What is the payment ratio? A Japanese analyst recently provided a bizarre project to inherit the legacy of cryptocurrency in Japan.
Japanese Cryptocurrency Heirs Face 110% Tax
According to a report by the Japanese crypto media "DeFire" yesterday (1st), an analyst recently pointed out as an example that if Japanese citizens need to inherit a huge crypto inheritance, they need to pay 110% tax to the Internal Revenue Service:
- Assuming that an heir needs to inherit Bitcoin worth 1 billion yen (approximately NT$213 million), he first needs to pay 55% inheritance tax, and then pay 55% income tax, for a total tax of 110%, which is 1.1 billion yen ( Approximately NT$234 million);
- At the same time, if inheritance is not adopted and the gift is made during lifetime, the recipient of the gift will also need to first pay 55% of the gift tax and then pay 55% of the income tax. The total tax is still 110%.
Better to just give up
In this regard, the analyst said that if they want to inherit this crypto inheritance, the heirs will not only get nothing after excluding taxes, but will also have to pay an additional 10% tax out of their own pockets. Therefore, it is better to choose not to inherit than to do this.
However, if you choose not to inherit, these cryptographic inheritances will eventually flow to the national treasury and be confiscated. Analysts joked:
Or don't die!
However, the analyst finally said that this strange tax system is obviously unreasonable, so it can be reported to the authorities to change the tax policy. However, another more feasible way is to immigrate to countries with lower tax rates, such as Singapore and Dubai, so that after tax deductions, you can still inherit part of your crypto inheritance.
There are huge calls for Japan’s crypto tax reform
In addition to the high inheritance tax, Japan’s taxation system in the field of cryptocurrencies is not friendly to investors. For example, according to Japan’s current legal system, if a company holds cryptocurrencies, it is required to pay tax at the end of each fiscal year. Taxes are paid on “unrealized gains” on cryptocurrency holdings.
Suffering from Japan's tax system, Japan's Financial Services Agency (FSA) is actively seeking to amend the cryptocurrency tax law in a legislative change request submitted on August 31, proposing to exempt the "unrealized gains tax" from the cryptocurrency held by Japanese companies. .
In addition, in July this year, the non-governmental organization Japan Blockchain Association also asked the Japanese government to make three major reforms in cryptocurrency regulation. The first reform is to cancel the "unrealized gains tax." Two other reform measures also include changing the tax on profits from personal crypto-asset transactions to individual declarations with a flat rate of 20%, and canceling the income tax on profits generated by individuals each time they trade crypto-asset.
