Japan's National Tax Agency: Tax investigations into cryptocurrencies in fiscal year 2024 uncovered 4.6 billion yen in back taxes, an increase of over 30% year-on-year.

According to Odaily Planet Daily, the Japanese National Tax Agency announced on December 11 the results of its tax investigation for fiscal year 2024 (July 2024 to June 2025). The results showed that 613 on-site investigations were conducted against individuals involved in cryptocurrency transactions, resulting in the recovery of approximately 4.6 billion yen in taxes. This represents an increase of approximately 31.4% compared to the 3.5 billion yen in the previous fiscal year, while the number of investigations also increased by approximately 14.6% year-on-year.

The IRS points out that cryptocurrency-related cases have significantly higher tax recovery amounts per transaction and higher rates of underreported income compared to the overall average for income tax investigations. Current tax investigations focus on the accuracy of profit and loss calculations, the completeness of transaction records, and the handling of special transactions such as DeFi, airdrops, mining, and staking. If multiple domestic or international exchanges are involved, all profits and losses must be reported together; otherwise, it may be considered an omission in the reporting process.

In addition, the National Tax Agency stated that it has continuously strengthened the collection and analysis of data on internet transactions and introduced AI technology to assist in screening investigation targets. If it is found that there has been any omission or failure to file a report, in addition to paying back taxes, late payment taxes and surcharges may also be levied. The maximum surcharge for failure to file a report can be 20%, and if there is intentional concealment or falsification, the recalculation tax rate can be as high as 35% to 40%.

At the tax level, the Japanese government and ruling party are discussing changing the current comprehensive taxation of income from crypto assets to a separate taxation system similar to that of stocks, with a potential uniform tax rate of 20%. They are also discussing the introduction of a profit and loss accounting and loss carry-forward mechanism. The direction of these reforms is expected to be further clarified in the year-end tax reform outline. (CoinPost)