Japan’s crypto industry advocates are calling for a revamp of the country’s tax regulations concerning digital assets. The Japan Blockchain Association (JBA), a non-governmental lobbying group, submitted an official request to the government, outlining three key measures to ease the tax burden on crypto holders.
Published on July 28, the request highlights the taxation of crypto assets as a major obstacle for Web3 businesses in Japan and a deterrent for citizens from actively engaging with digital assets. To address this, the JBA proposes three significant changes.
Firstly, the JBA aims to eliminate the year-end unrealized gains tax on corporations holding crypto assets. This would remove taxes on profits that exist only on paper, where relevant transactions have not been executed. The National Tax Agency already exempted local firms from taxation on year-end unrealized gains from cryptocurrencies they had issued.
Secondly, the JBA calls for a shift in the taxation method for personal crypto asset trading profits, advocating for a change from comprehensive taxation to self-assessment separate taxation, with a uniform tax rate of 20%. They also propose a three-year term for deducting losses from the depreciation of digital assets.
Thirdly, the association seeks to eliminate income tax on profits gained from exchanging crypto assets. They argue that the borderless nature of the Web3 era and the diverse types of crypto asset transactions make tax calculations exceedingly complex.
In late July, Japanese Prime Minister Fumio Kishida reaffirmed the country’s commitment to fostering the Web3 industry, recognizing its potential for transforming the internet and driving social change. On the same day, Binance CEO Changpeng Zhao announced the launch of the cryptocurrency exchange’s services on a new Japanese platform in August.
As of publication, the JBA had not responded to Cointelegraph’s request for comment on their tax revision proposal.