Japanese token issuers not subject to 30% crypto tax on profits made on paper.
On June 20, the National Tax Agency revised a law in Japan that exempts token issuers from corporate taxes on unrealized cryptocurrency gains.
The tax exemption comes into effect almost six months after the Japanese government approved a proposal to remove the requirement for crypto companies to pay taxes on paper gains on tokens they issued and held.
Japanese lawmakers have been discussing new crypto tax rules since August of last year as part of a broader tax reform for 2023. However, the tax authority only gave final approval this week. Under the new rules, Japanese firms issuing tokens are exempt from paying a set 30% corporate tax rate on their holdings. Prior to this law, even unrealized gains were subject to taxation.
The ruling Liberal Democratic Party (LDP) expects to make it “easier for various companies to do business that involves issuing tokens.”
- Twitter hacker gets 5-year sentence for crypto theft and SIM swapping.
- Volatility Shares Trust plans to list a leveraged Bitcoin futures ETF.
- CFTC acts against NY resident for $21M crypto scam.
The cryptocurrency industry in Japan has been undergoing significant changes lately. Since June 1, the country has been enforcing stricter Anti-Money Laundering (AML) measures to trace cryptocurrency transactions to align Japan’s legal framework with global crypto rules. Lawmakers revised the AML legislation in December after the Financial Action Task Force (FATF) found it to be insufficient.
In June last year, the government passed legislation prohibiting the issuance of stablecoins by non-banking institutions. The bill, which was implemented just a few weeks ago, stipulates that stablecoin issuance in the country is limited to licensed banks, registered money transfer agents, and trust companies.
Japan was one of the first countries to legalize cryptocurrency as a form of private asset, and its crypto regulations are among the strictest in the world. After the Mt.Gox and Coincheck hacks, Japan’s financial regulator tightened rules on crypto exchanges. Local regulations are believed to have facilitated the speedy return of assets to FTX users in Japan following the exchange’s global collapse, in contrast to users in other countries without a clear deadline for their refunds.
Magazine: Crypto City: Guide to Osaka, Japan’s second-biggest city