Japan’s regulator to consider lowering tax rate on crypto income
It currently ranges between 15% and 55%
04.09.2024 - 15:10
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What’s new? Japan’s Financial Services Agency (FSA) has published plans for a comprehensive revision of the tax code for fiscal year 2025, including provisions on cryptocurrencies that could reduce the tax rate applicable to this type of asset. Officials separately noted that crypto assets should also be treated like traditional financial assets whose investments are available to the public.
What else is known? Cryptocurrency gains in Japan are currently taxed in the same way as other income, with rates ranging from 15% to 55%. The highest can apply to income over 200 000 Japanese yen ($1377) if certain other conditions are met. In comparison, profits from stock trading are taxed at a 20% rate only at the highest levels.
Corporate holders of cryptocurrencies must pay a flat rate of 30% on their assets at the end of the fiscal year, even if they did not make a gain on the sale.
How are changes being made to the country’s tax policy? Ministries send requests for tax reform to the ruling party, which then passes them on to the Tax System Research Committee and the national legislature for consideration. The reform only becomes law if it is approved by both houses of the Japanese government: the House of Representatives and the House of Councillors.
Supporters of the crypto industry in Japan have been pushing for a revision of the national tax regime for digital assets for several years. The Japan Blockchain Association has formally asked the government to lower the tax rate on crypto assets in 2023.
On July 19, the group also submitted a request for crypto asset tax reform for fiscal 2025 in an attempt to promote further growth in the crypto sector. Among the proposals were a flat 20% tax rate on cryptocurrency and a three-year deduction for losses.
Despite these efforts, the requests have yet to result in any changes to industry policy in Japan.
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