Virtual currency and overseas relocation (overseas migration)｜Tax accountant Minoru Kida

About moving abroad while holding crypto assets

nice to meet you. My name is Kida, a tax accountant.

In this column, I will talk about virtual currency and overseas transfer (overseas migration).

If an individual residing in Japan is transferred overseas (planned for more than one year) while holding virtual currency (crypto assets) with unrealized gains, what kind of tax will be imposed?

In conclusion, it is considered that there will be no tax in Japan on unrealized gains of virtual currency due to overseas migration.

If you move out of Japan after July 1, 2015, and if you have “eligible assets” of 100 million yen or more, you will be required to pay income tax, etc. on unrealized gains (this is called taxation when moving out (It is sometimes called a departure tax.)

However, since virtual currency is not included in this “target asset”, there is no need to pay income tax etc. when moving out of the country. Please note that crypto asset derivatives (financial derivatives) carry the risk of taxation when moving out of the country as unsettled derivatives.

What if I buy and sell crypto assets using a Japanese exchange/overseas exchange while I am stationed overseas?

In the previous example, what would happen if you bought and sold virtual currency using a Japanese exchange while stationed overseas?

Under the tax system at the time of writing this manuscript, in the above case, tax payment in Japan is not considered necessary.

In addition, many Japanese virtual currency exchanges do not anticipate transactions by overseas residents, and some exchanges require that accounts be closed when moving abroad. Whether it is possible to trade on the virtual currency exchange is another matter.

Also, if you buy or sell virtual currency at the virtual currency exchange in the country where you live abroad while you are stationed abroad, you do not need to report it in Japan.

Whether you do business in Japan or overseas, you will be taxed in the country of emigration according to the tax system of the country of emigration.

(However, depending on the country, there are countries that tax the gain on the transfer of virtual currency in the first place, and countries that do not tax it, and the tax rate is also different. For example, in Singapore, if you transfer virtual currency for long-term holding, the transfer gain is tax-free. becomes.)

What is overseas migration in the first place?

What if you weren’t stationed overseas and moved overseas after retirement? Or what if I want to study abroad for more than a year?

In such cases, the following factors must be considered comprehensively.

• Status of residence such as length of stay in each country, plans to stay overseas for a long period of time (1 year or more), etc.
• In which countries are there occupations that normally require residence for more than one year continuously?
• In which country do relatives who share the same livelihood, such as a wife and children, live?
• in which country the major assets are located;

In the case of studying abroad, there is no job in Japan or overseas in the first place, and even if you are stationed overseas, you may leave your wife and children behind in Japan. Even in such a case, there are cases where you are treated as an overseas resident for tax purposes (referred to as a non-resident in technical terms) based on other circumstances, and there are cases where this is not the case, depending on the case.

In addition, according to the rules on income tax (Article 15 of the Income Tax Law Enforcement Order),

If the person “has an occupation that normally requires continuous residence for one year or more,” he/she is “presumed to have no domicile in Japan.”

There is a stipulation. In the case of the person stationed overseas at the beginning, unless there is a strong reason to think that the person is a resident of Japan, it can be considered as a non-resident.

*This contribution is based on the tax system at the time of writing.

Tax accountant, Minoru Kida tax accountant officeYutaka Kida

After graduating from the Faculty of Economics at the University of Tokyo, he worked at Deloitte Touche Tohmatsu LLC and Legacy Tax Accountant Corporation before opening the Minoru Kida Tax Accountant Office. He advises wealthy individuals on inheritance tax and international tax matters. The cryptocurrency of interest is Bitcoin. I still have zero holdings, but I’m thinking of saving a little bit from now on.

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