Japan considers Bitcoin tax after MtGox failure

[Redfairen]

Source: Agence France Presse

Japan is looking at ways to tax Bitcoin transactions, a report said Tuesday, in the wake of the spectacular failure of the Tokyo-based MtGox exchange after a half-billion-dollar theft.

The finance ministry and the national tax agency are studying possible rules that could govern transactions using the digital currency, the Yomiuri Shimbun newspaper said.

Authorities believe purchases made with Bitcoin can be subject to consumption and corporate taxes, even though the unit is not a legal currency, the Yomiuri said without citing sources.

"However, many countries including Japan do not have concrete frameworks to levy taxes (on Bitcoin transactions)," the Yomiuri said, leaving officials basically stumped.


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[Kablooie]

1. Since the whole point of Bitcoin is to enable totally anonymous transactions ...

it seems unlikely that people who use Bitcoin will voluntarily tell the government what they've been doing.

There is no way to track who sends and who receives Bitcoins.
Even the sender and receiver don't have any way to track down each other.
It's completely anonymous.

It's a new world out there.
The old minds that run governments don't have a clue.

[Xithras]

3. In theory, it should be no different than barter.

Business barter exchanges have existed for many decades, and are taxable in most countries. Here in the U.S., failure to report noncash transactions to the IRS is tax fraud and can land you in prison. The medium of the exchange is irrelevant.

[Kablooie]

4. I guess when you first use cash to buy Bitcoins there will be a record of that.

But from that point on there will be no record unless the Bitcoins are converted back to cash.

Bitcoin is regularly used to buy illegal drugs and other illegal services so I wouldn't expect a lot of reporting to be going on.

[AtheistCrusader]

2. Hahaha good luck with that.