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Japan decides bitcoin isn't a currency, but will be taxed

Under the new regulations, the Japanese government will treat bitcoin like any other goods and services, and will tax any transactions made using it.

Image: AP Photo/Frank Jordans

JAPAN’S GOVERNMENT HAS said it doesn’t consider bitcoin to be a real currency, but will tax any transactions made using it.

The crypto-currency will be treated like any other goods and services, with commercial sales of bitcoin itself and bitcoin-based transactions subject to sales tax. Any gains on exchange rates will be taxed as well.

Commercial banks, however, are not allowed to offer bitcoin as a product to their customers, or open accounts that hold it.

In a statement from the Japanese government, it said that bitcoin “does not fall under the category of a currency” as defined by Japanese law, and “generally speaking it is subject to taxation if it meets conditions laid out in income tax law, corporate tax law and sales tax law, among others.”

The Japanese government was under pressure to come up with some form of regulations following the collapse of MtGox, the Tokyo-based bitcoin exchange that filed for bankruptcy last week.

The move could be the first step towards more formal regulations, although the Japanese government has said it has no plans to regulate it as a financial product.

Earlier this week, the UK tax authority said it will not impose the 20 per cent tax on the creation of bitcoin, although corporation and income tax would still apply.

(Additional reporting from AFP)

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About the author:

Quinton O'Reilly

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