Japan Suggests Tax Cut on Long-term Crypto Holdings

• Japan to tax crypto as long-term assets, boosting digital economy role.
• Proposed tax exemption for businesses on unrealized cryptocurrency gains in Japan.
• Japan’s tax reform targets global crypto market revenue, adjusts for digital assets.

Japan is preparing to implement a new tax system for businesses that hold cryptocurrencies as long-term assets. This move is part of a broader strategy to establish Japan as a significant player in the rapidly expanding digital economy, representing just one element of that strategy.

Members of the Japanese ruling coalition, consisting of the Liberal Democratic Party and Komeito, intend to propose a tax exemption on unrealized gains from cryptocurrency assets held by businesses.

Expanding the Horizon of Interest

The push to draw in long-term investors within the cryptocurrency market is fueling this change. Japanese companies must now settle their corporate taxes based on the worth of their digital currency assets at the year’s end.

Additionally, the current tax system is expected to undergo a significant alteration with the suggested modification, which is likely to be part of the tax plan for fiscal year 2024. This reflects the increasing recognition of digital assets’ unique characteristics and potential impact on Japan’s economy.

The planned tax reform aims to lower taxes for Japanese companies and indicates Japan’s intention to increase revenue from the global cryptocurrency market.

At a moment when other areas in Asia are enhancing their efforts to emerge as key hubs for cryptocurrency, this choice has been taken. In addition, the specifics regarding a strategy to modify how cryptocurrency acquisitions by non-Japanese residents are taxed still need to be determined. As Japan progresses in digital currency, it coincides with its revisions to tax regulations.