Japanese Tax Body Updates Crypto Guidelines For Staking And Lending, But NFTs Not

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Japan’s tax body – the National tax agency – updated their Crypto FAQ, addressing issues such as crypto staking and lending. But the organization made no mention of non-fungible tokens (NFTs) or token airdrops – a sign it does not currently consider NFT trades or airdrops taxable.

According to CoinPost, the agency (known as NTA) updated its FAQs on December 22 to add new sections relating to “profits made” from coin staking and lending. He noted that when calculating taxes – which must be done in fiat yen – it is important for crypto investors to take note of the market price of the coins at the time of acquisition.

The revised FAQ explains that the same rules should apply to staking and lending that already apply to crypto mining: the NTA considers mining to be the “acquisition” of coins, which means that all calculations of taxes must be made at the time the coins come into minors’ possession, using market prices to calculate their value in yen in fiat.

If the miners then sell their coins at a higher market price, the profit (in yen) should be reported.

iForex Japan, who also reported on the development, explained the system giving the following example:

“If the [tokens] obtained through mining efforts were worth 50,000 yen each at [the time of mining], which would be considered the purchase price. What if the [miner then] sold the parts at a later date when [the price] reached 100,000 yen, the profit would be taxed at 50,000 yen. Costs incurred during the mining effort [electricity fees] can be recognized as an expense.

Staking and lending, the NTA explained, must also be taxed in the same way: when coins are staked or loaned, a taxpayer must record the market price at the time the contract is entered into. When the contract is concluded, creating “profits”, the “difference between the sale price and the purchase price” must be declared and is taxable.

As such, the organization explained, people who do not record market prices at the time might run into problems later when they are forced to file tax returns. He noted that, as staking and lending is often done through crypto exchanges, trading platforms can keep records of relevant information.

But he cautioned that relying on the exchanges to deliver the data at a later date was not a foolproof method in all cases – and that individuals were responsible for their own record keeping.


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