Japan plans to stop collecting consumption tax on Bitcoin purchases next year

Source: Weiyang.com

Japan plans to stop collecting consumption tax on bitcoin purchases next spring, according to Nikkei Asian Review. The move will not only reduce costs for bitcoin buyers, but also ease the administrative tax burden on e-currency exchange operators.

Japan is the only country in the G7 that imposes a sales tax on bitcoin purchases. Currently, buying bitcoin on Japanese exchanges requires an 8% consumption tax and other fees. The elimination of the consumption tax will promote the growth of the use of bitcoin and other virtual currencies as alternatives to traditional currencies.

“Administrative work will also be reduced,” said one major bitcoin exchange operator.

Japan’s Financial Services Agency (FSA) clarified the nature of electronic money this summer and will decide whether sales tax should be levied on electronic money purchases based on its nature. According to Nikkei Asian Review, the discussion between the Ministry of Finance and the FSA will lead to a formal tax joint advisory panel hearing at the end of the year.

Earlier this year, the Japanese cabinet approved a new regulation for virtual currencies, which recognized that electronic currencies such as Bitcoin can function as a legal means of payment. In May, the Japanese parliament (a legislative body consisting of the upper and lower houses) passed a bill to regulate virtual currency exchange operators in order to better protect users.

As of September, nearly 2,500 stores and restaurants in Japan accept Bitcoin as a payment method, according to ResuPress, a Tokyo-based Bitcoin exchange operator that plans to allow customers to pay electronic bills with Bitcoin as early as this year.