On June 25, Japan’s Minister of Finance, senator Fujimaki suggested that the current tax rate for crypto transactions in the country, which goes up to a maximum of 55 percent, could be swapped with a 20 percent flat tax similar to stocks or forex trades.
While Japan is unsure if the current tax framework should lose its progressive scale — mentioning “tax fairness” as one of the arguments in favor of sticking with the old model — some major markets don’t have clear guidelines for how Bitcoin and altcoins are taxed at all. Here’s how cryptocurrencies are currently levied from the U.S. to Switzerland.
Crypto’s tax status: Investments (small-scale holding); working capital (if used regularly)
Taxes on gains: Free, if below £11,850, then up to 45 percent
Her Majesty’s Revenue and Customs (HMRC), an agency responsible for collecting taxes in the U.K., introduced its guide on the taxation of Bitcoin and other coins in 2014. Thus, income received — and charges related to activities involving crypto — are subject to corporation tax, income tax or capital gains tax, depending on the specifics. As a HMRC representative explained to British media outlet Alphr, “whether any profit or gain is chargeable or any loss is allowable will be looked at on a case-by-case basis.”
Nevertheless, cryptocurrencies normally fall into the capital gains tax category for casual users in the U.K., being considered investments. However, some traders might be liable to income tax, depending on how regularly they trade and the volume of those operations. According to HMRC:
“Where an asset (including Bitcoin) is held as an investment — as opposed to being working capital in a trading activity — the presumption is that any profit or gain on its disposal will be charged to Capital Gains Tax.”