The Japanese tax authority publishes a general tax treatment document on NFT, proposing guidelines on the application of NFT taxation

According to Coinpost, Japan’s National Taxation Administration has published a general tax treatment document on NFT, in addition to the taxation of income tax, it also puts forward guidelines on the application of consumption tax. Regarding chain game transactions, "the in-game currency (token) is frequently acquired and used, and the valuation of each transaction is more complicated." Therefore, the amount obtained is calculated based on the in-game currency (token) and is uniformly calculated at the end of the year. Miscellaneous income calculation by "simple method"; the rewards obtained by chain games are classified as miscellaneous income in principle and should be subject to income tax, but if the in-game tokens obtained as rewards can only be used in the game, that is, they cannot be exchanged for assets outside the game, It is not considered as a taxable token; for this "NFT is stolen or disappeared due to improper access", etc., it is eligible to deduct miscellaneous losses; in addition, if an individual creates NFT and sells it to a third party (primary distribution ), or the person who buys the NFT resells it to others (secondary distribution), the profit should be subject to "income tax", in this case, the concept is divided into "transfer of viewing rights of digital art", the transaction generated Income is taxed as “miscellaneous or business income” on primary sales and as “transfer income” on secondary sales; in any case, it is generally taxed on income minus expenses, etc. The expenditure comes from digital art, and it is clearly stated that "the cost required to form an NFT" does not include the production cost of the digital art itself. If the NFT is given to an acquaintance for free, the giver will not be taxed, but the giftee may need to pay tax. On the other hand In principle, the company is taxable. If an NFT with economic value is obtained through the gift or inheritance of other individuals, gift tax and inheritance tax will be levied after individually evaluating its value, taking into account "content, nature, transaction reality, etc.". In the case of sales tax treatment of NFT transactions, if an NFT is created and sold to Japanese consumers through the market, and gets paid, then the creator of the NFT will be levied sales tax. In addition, when selling the purchased NFT to others as a secondary distribution, Sales tax will be levied, and if the secondary sales and prices of NFTs are repeated, continuous, and independent, they are considered business transactions.