Overseas Exchanges and Japanese Crypto Tax Reporting

"Will the tax office find out about my overseas exchange account?" is the wrong question, and asking it that way leads people to the wrong answer. The reporting obligations that actually apply to a Japanese resident do not depend on where the exchange sits, and one of the two statements people expect to file turns out not to apply to crypto at all.

Where the coins are, legally

Start with the point that decides everything else. Under the reporting rules for overseas remittances and related statements, crypto is a category of property whose location is determined by the address of the person who holds it, not by the location of the exchange. The NTA states this directly in its crypto FAQ.

That single rule produces both of the results below.

Not on the overseas assets statement

FAQ section 7-3 answers the question head on: crypto held at an overseas crypto exchange is not reportable on the overseas assets statement. The statement is filed by residents in respect of assets located abroad, and because crypto is located at the holder's own address, a Japanese resident's crypto at a foreign exchange is not property located abroad.

People are often surprised by this and file it anyway, or assume that because it is not on that statement there is nothing to report. Both are wrong.

On the assets and liabilities statement instead

FAQ section 7-1 says crypto held on 31 December is within the scope of the assets and liabilities statement, entered by type of crypto asset, by use and by location. It then says explicitly that whether the exchange holding the crypto is domestic or overseas makes no difference to whether it must be entered.

That is the practical answer to the original question. There is no separate overseas crypto regime. There is one statement, and a domestic exchange balance and an overseas exchange balance go on it the same way.

How to value it

FAQ section 7-2 sets out the valuation for that statement, and it mirrors the inheritance rule. Where an active market exists, use the trading price published by the crypto exchange service provider you deal with, as at 31 December. The notes allow the price on a balance certificate the exchange issues on request, allow the sell side price where a dealer publishes both, and let you pick one exchange where you deal with several.

Where a market price cannot reasonably be determined, an estimated value may be used, computed by a reasonable method: an appropriate actual sale price at 31 December, failing which the sale price if you dispose of it between 1 January and the statement's filing deadline, failing which the acquisition cost.

Income tax does not care where the exchange is either

Separately from the statements, the income itself is taxable whatever venue produced it. Japanese residents are taxed on their crypto gains as miscellaneous income aggregated with other income, at progressive national rates of 5% to 45% plus a flat 10% resident tax. An overseas exchange changes nothing about that.

What it does change is the paperwork. Domestic exchanges issue an annual transaction report, which FAQ section 2-7 treats as the primary evidence of purchase and sale amounts. Overseas exchanges and person to person trades have no equivalent, so the same section directs you to reconstruct the amounts from bank account movements and from trade history combined with published exchange rates. That reconstruction is the real cost of trading offshore, and it grows every year you leave it.

What to do now

• List every venue, domestic and overseas, and every self custody wallet.
• Export full history from each while the account still exists. Exchanges close, restrict jurisdictions and lose old data.
• Fix your 31 December balances and their yen values for the assets and liabilities statement.
• If cost basis is genuinely unrecoverable, understand the 5% of sale price fallback in FAQ section 2-7 before you rely on it, because it usually produces a larger taxable gain than the truth.

See our Japan crypto tax guide for the income side, and crypto tax reports for reconciling multiple exchanges into one set of numbers.

General information, not tax advice. Confirm your filing obligations with the National Tax Agency or a qualified tax professional.