- Japan approves crypto tax reform for 2024, easing corporate asset valuation.
- Corporations exempt from year-end market price tax on held cryptocurrencies.
- Reform aligns corporate crypto tax with private investor rules, simplifies compliance.
On December 22nd, during a cabinet meeting, the Japanese government approved the crypto tax reform structure for the fiscal year 2024. This reform includes a significant modification that impacts companies in possession of cryptocurrency assets.
Under the modification, corporations that hold virtual currencies issued by external entities are now exempt from the tax requiring valuation at market prices at the end of the accounting period.
Alleviating the Load of Tax Obligations
Furthermore, this implies that, just as private investors are subject to taxes, corporations will be taxed solely on the profits they earn from selling digital currencies and tokens. Additionally, the intent behind this modification is to simplify the process for businesses to fulfill their tax obligations on the cryptocurrency assets they possess and manage.
Due to this modification, the method for calculating the mark-to-market value at the end of the period under the Corporation Tax Law may be altered. Historically, for the purpose of their annual financial reporting, firms would determine the difference between the book value and the market value of their cryptocurrency assets. However, under the revised regulation, this mark-to-market valuation is no longer factored in if the asset is maintained without interruption.
The JCBA in Japan had requested the alteration in taxation for the year 2024, and this method is how it would be put into effect. This adjustment will support the growth of domestic companies employing blockchain technology and attract global projects.
In the previous year’s tax reform, the sole digital currencies exempt from mark-to-market taxation were those distributed by the companies that created them. Nevertheless, the amendment made this year was driven by the growing calls for equal treatment regarding the digital currencies of other businesses.
Disclaimer: The insights, perspectives, and data presented in this price analysis are published in good faith. Readers must conduct their own research due diligence. Any decision made by the reader is solely their responsibility, and Crypto Outlooks shall not be held responsible for any consequential or incidental harm or loss.
