Japanese Tax Administration Updates Crypto Staking and Lending Guidelines

Japan’s tax authority, the National Tax Agency, has updated its cryptocurrency FAQs to include information on staking and crypto lending. However, the body made no mention of non-fungible tokens (NFTs) or token airdrops, indicating that it does not consider NFT trade or airdrops to be taxed at the moment.

According to CoinPost, the authority revised its FAQs on December 22 to include new sections about “earnings gained through” staking and lending coins. It stated that while doing tax computations – which must be done in fiat yen – crypto investors should keep track of the market price of coins at the time of purchase.

The updated FAQs state those same regulations must be in place for lending and staking, similar to those already applicable to crypto mining. The NTA considers mining to be “acquiring” coins, which means that tax calculations must be completed when the coins arrive in possession of miners, using prices in the market to determine their value in fiat yen.

If miners then sell their coins at a greater market price, they must disclose their profit (in yen).

The NTA clarified that when coins are staked or lent, a taxpayer must record the market price at the time of the transaction. The “difference between the sale price and the purchase price” must be disclosed  is subject to taxation.

According to the NTA, individuals who fail to record market values at the time may face complications later on when they are required to file tax returns. It was pointed out that because staking and lending are frequently done through crypto exchanges, trading platforms may maintain track of the required data.

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