- Japan’s Government updates its NFT transaction guidelines by adding more specific rules
- The creators will be liable to pay consumption tax every time they sell an NFT in the Japanese market
- If someone gifts NFT to their friend for free, then they might not be taxed
Japan’s National Tax Agency (NTA) has declared taxes on NFT transactions for both buyers and creators. The new rules state income tax and consumption tax will apply every time an investor buys or a creator sells.
The agency will also count taxes on blockchain-based games and in-game currencies on their yearly revenue amount.
Japan seems to be taking a strict approach to taxes this year. Despite the government’s claim that they would loosen regulations on NFT firms, NTA has come up with new ways to tax people.
The country has been leading the NFT adoption scene for many years. A lot of artists and developers from Japan have brought revenue valued to be $1.36 billion in 2022, according to ResearchAndMarkets.com.
Furthermore, NFT, Web3, and metaverse are widely adopted among local consumers at a massive level.
Now, NTA’s guidelines are charging NFT primary and secondary sales under the laws of business & miscellaneous income and transfer income.
The Web3 games’ players will also be subjected to paying the charges if they transfer money outside the platform. But no taxes apply for rewards earned within the game.
The agency shared they are working on adding more specifications and clarity with time based on how the market moves.
Other than Japan, USA and UK have released their set of guidelines for taxes related to NFT transactions as well.