Japan Government Asked to Amend Tax Laws for Crypto Gains and Transactions
The Japan Blockchain Association (JBA) has submitted a request to the government in Tokyo to revise the taxation regime for virtual currencies. The organization led by co-founder and CEO of Japanese crypto exchange Bitflyer, Yuzo Kano, insists that the proposed changes would allow more domestic companies to enter the Web3 sector.
- The JBA is calling for a review of the taxation system for crypto assets, which it says is hindering the growth of the Web3 business in Japan.
- The association wants unrealized profits from tokens issued by third parties to be exempt from taxation.
- The JBA urges for changing the taxation method for individual crypto asset transactions to separate self-assessment taxation with a flat tax rate of 20%.
- The association suggests that losses should be carried forward and deducted in the three years following the year in which they occurred.
- The JBA also wants the Japanese government to eliminate income taxation for profits made when crypto assets are exchanged.
JBA quoted data from the Japan Crypto Asset Trading Association which shows that the number of people opening crypto asset trading accounts in Japan continues to grow. As of April 2023, they were approximately 6.8 million. It also noted that almost 44% of the respondents in its own survey said they would more than double their investments if they changed to separate self-assessment taxation.
The industry body believes these amendments would increase the number of crypto users in the country as well as the amounts invested in crypto assets, and ultimately lead to higher tax revenues for Japan.
Hot Take
The Japan Blockchain Association has requested the Japanese government to amend tax laws related to crypto gains and transactions. The organization argues that the current taxation system hinders the growth of the Web3 sector and limits the ownership and use of digital assets by citizens. The JBA proposes changes such as exempting unrealized profits from third-party tokens, implementing a flat tax rate of 20% for individual crypto transactions, and allowing losses to be carried forward and deducted. By making these changes, the association believes that more companies will enter the Web3 market, the number of crypto users will increase, and Japan will generate higher tax revenues.
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