Crypto News– The FSA document highlights that the Ministry of Economy, Trade, and Industry has also given its approval for the reform.
Japan Swift Demand for Crypto Tax Reform Ignites Investor Enthusiasm
The new tax framework for crypto assets (virtual currency) necessitates adjustments in corporate taxation. The longstanding issue of advocating for a year-end mark-to-market tax on ‘crypto assets held by third parties’ is being addressed. The Japan Blockchain Association (JBA) had already raised the matter of tax reform concerning crypto assets held by third parties in a tax reform proposal submitted to the government back in July.
Under the current system, cryptocurrency companies are required to pay taxes on unrealized gains (the increase in token value) at the end of each fiscal year, even if they haven’t sold or exchanged their cryptocurrencies for fiat. This has been a cause for concern in the cryptocurrency industry. The proposed tax reform seeks to align Japan’s taxation system more closely with other nations, where companies are only taxed on the cryptocurrencies they convert into fiat or sell. This change would alleviate the tax burden on cryptocurrency companies and potentially stimulate industry growth in Japan.
The FSA and the Ministry of Economy, Trade, and Industry are expected to continue collaborating with the government to enact the proposed tax reform for crypto assets held by third parties. Such a move could enhance Japan’s appeal as a destination for cryptocurrency companies and investors.
1 Comment