Japanese National Tax Agency: Cryptocurrency tax investigation in 2024 recovers 4.6 billion yen, a year-on-year increase of over 30%

Odaily Planet Daily reports that the Japanese National Tax Agency announced the results of its 2024 fiscal year (July 2024 to June 2025) tax investigations on December 11. The investigation into individual crypto asset (cryptocurrency) transactions involved a total of 613 on-site investigations, with a total tax recovery of approximately 4.6 billion yen, a 31.4% increase compared to 3.5 billion yen in the previous year. The number of cases also increased by about 14.6% year-on-year. The National Tax Agency pointed out that cases related to cryptocurrencies are significantly higher than the overall average in terms of single-instance tax recovery amounts and underreported income during on-site investigations. Current focus areas of the tax investigations include the accuracy of profit and loss calculations, the completeness of transaction records, and the reporting and handling of special transactions such as DeFi, airdrops, mining, and staking. If multiple domestic and foreign exchanges are involved, all profits and losses must be consolidated in the declaration; otherwise, it may be considered as an omission. Additionally, the National Tax Agency stated that it has been continuously enhancing data collection and analysis of internet transactions and has introduced AI technology to assist in screening investigation targets. If underreporting or non-reporting is confirmed, besides paying back taxes, penalties such as delinquency tax and additional taxes may be levied. Non-reporting cases can be penalized with an additional rate of up to 20%. If there is deliberate concealment or falsification, the tax rate for heavy penalties can reach as high as 35% to 40%. On the legislative level, the Japanese government and ruling party are discussing changing the taxation of crypto asset income from the current comprehensive taxation to a separate declaration taxation similar to stocks, with a unified tax rate of 20%, and introducing mechanisms for profit and loss offset and loss carryforward. These reform directions are expected to be further clarified in the tax reform outline at the end of the year. (CoinPost)