Crypto industry advocates in Japan call for the revision of the national tax regime for digital assets.
Crypto industry advocates in Japan, represented by the Japan Blockchain Association (JBA), are urging the government to revise the tax regime for digital assets. The JBA filed an official request outlining three key steps to ease the tax burden on crypto holders.
The JBA considers the taxation of crypto-assets as a significant obstacle for web3 businesses in Japan, hindering citizens from actively using and owning digital assets. To address this issue, the JBA proposes three major changes:
1. Eliminating year-end unrealized gains taxation on corporations holding crypto assets.
2. Abolishing taxes on unrealized gains in third-party issued tokens.
3. Following the example set by the National Tax Agency, which relieved local firms from taxation of year-end unrealized gains from cryptocurrencies they have issued.
The goal is to alleviate pressure on the digital economy and facilitate the growth and adoption of cryptocurrencies in Japan.
Japan Blockchain Association’s Taxation Requests for Crypto Assets
The second request by the Japan Blockchain Association focuses on the taxation method for personal crypto asset trading profits. It proposes changing from the current comprehensive taxation to self-assessment separate taxation, with a flat tax rate of 20%. Additionally, it suggests allowing a three-year term for deducting losses from digital asset value depreciation.
The third request seeks the elimination of income tax on profits generated from individual crypto asset exchanges. The JBA believes that with the borderless web3 era, crypto asset exchanges will become a mainstream economic activity, making tax calculations challenging due to the diversity of transactions and crypto assets involved.
At the end of July, Japanese Prime Minister Fumio Kishida reiterated the country’s commitment to fostering the Web3 industry, recognizing its potential to revolutionize the internet and bring about social change. On the same day, Binance CEO Changpeng Zhao announced the upcoming launch of the cryptocurrency exchange’s services on a new Japanese platform in August 2023.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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