Amid the bankruptcy filing and closure, Japanese authorities are considering adopting regulatory and taxation measures for bitcoin, according to a report from Reuters which cited a cabinet meeting scheduled for Friday.
The Japanese cabinet will look at the best methods to implement taxes for the virtual currency and how authorities can apply the nation’s existing laws. It is believed the government will find their efforts extremely difficult because there is no central body and finding a connection between digital holdings and individuals.
“We haven’t yet thoroughly grasped the situation, but some kind of regulation is needed from the perspective of consumer protection, and we will also discuss [bitcoin] from the perspective of imposing asset tax,” said Takuya Hirai, head of an IT panel in the ruling Liberal Democratic party.
Tokyo officials have already confirmed that they do not wish to enter this initiative alone – the Bank of Japan and federal ministries have long said they cannot intervene and cannot be held responsible for any losses. Instead, the Asian economic powerhouse insists on establishing international cooperation in order to avoid any loopholes that bitcoiners could very well exploit.
This comes as Britain’s Her Majesty’s Revenue and Customers (HMRC) announced that it would be ending its attempts to apply a value added tax (VAT) against bitcoin mining. Instead, it will just maintain present income and corporate taxes.
“Bitcoin may be held as an investment or used to pay for goods or services at merchants where it is accepted. In the UK, there are already a number of outlets, including pubs, restaurants and internet retailers, that accept payment by Bitcoin,” the HMRC noted Monday. “Income received from Bitcoin mining activities will generally be outside the scope of VAT on the basis that the activity does not constitute an economic activity for VAT purposes because there is an insufficient link between any services provided and any consideration received.”
Bitcoin has regained some of its losses that occurred this past month as it is trading at around $650.
