The authorities allowed capital gains tax to be removed for unrealized corporate digital assets

Japan to revise taxation to attract crypto startups

26.08.2022 - 13:30

253

1 min

What’s new? Japan’s Financial Services Agency and Ministry of Economy, Trade and Industry have allowed the possibility of making changes to the digital asset taxation system for corporate entities ahead of the 2023 tax reform. The goal is to lower the tax rate and prevent the outflow of promising startups abroad, writes local news agency Yomiuri.

Yomiuri’s material

What else does the outlet report? According to the current taxation laws, unrealized gains are taxed at the end of each fiscal year. The proposed changes include removing capital gains taxes on unrealized corporate crypto assets, as well as changing the classification of digital currencies to reduce the tax from 55% to 20%.

According to Cointelegraph, in Japan, individual and corporate earnings from digital assets of over 200 000 Japanese yen ($87 799) in a fiscal year are classified as “miscellaneous income” and are taxed at a rate ranging from 15% to 55%.

By comparison, profits derived from stock and currency trading are taxed at 20%. For foreigners permanently residing in Japan, the rates start at 55%. All activities that generate crypto profits, such as DeFi lending, mining, or trading, are also taxed as “miscellaneous income.”

In August, the Bank of Japan abandoned plans to issue a digital yen due to a lack of public interest. Most citizens prefer to use the services of private banks and digital payment systems because of inexpensive service and additional bonuses such as cashback.

Subscribe to Getblock Magazine and stay up to date with the latest news from the world of cryptocurrencies and the digital economy