In June, the Japan Financial Services Agency received requests to revise the taxation of token issuers. According to MP Taira Masaaki, the Financial Services Agency and the Ministry of Economy, Trade and Industry are considering tax reform that will enter into force next year.
The essence of the reform is to exempt cryptocurrency organisations trading tokens from taxation on unrealized gains. Currently, startups pay taxes on unrealised gains, as their assets are taxed at market value. At the moment, it is 55%.
In this regard, the Japan Crypto Assets Association and the Japan Cryptocurrency Trading Association have asked higher authorities to consider lowering the tax.
The country risks being left without cryptocurrency organisations if the taxation does not change.
The request for revisions to the tax system also applies to:
- needs to improve the tax filing system;
- the need to develop crypto assets in Web3;
- comparisons with foreign taxation systems.
The new system will provide a fixed tax of 20% for individual crypto investors.