Japan Blockchain Association Requests Crypto Tax Reform

Japan’s Blockchain Association (JBA) reportedly urged the government to revise tax rules imposed on virtual assets.

The JBA has called on the Japanese government to reform its crypto tax rules. The association argues the tax system in its current form hinders the growth of Web3 in Japan.

Revised Tax Rules Will Foster Web3 Growth

According to reports by local Japanese news website, Coinpost, the JBA requested that government reconsider its current tax system for virtual currencies as it hinders the growth of Web3 in the country. The organisation says its proposed revisions would allow more domestic companies to enter the burgeoning sector. The JBA also called for developing a crypto-friendly environment where citizens can own and use crypto assets.

The JBA, led by co-founder and CEO of Bitflyer, Yuza Kano, suggest the following three reforms:

Eliminating Year-End Unrealised Gain Tax on Third-Party Issued Tokens

Japan’s National Tax Agency (NTA) amended rules on corporate tax rules which provide a tax exemption to companies issuing cryptocurrencies. Under its previous system, companies that issue cryptocurrencies must pay taxes on unrealised gains at the end of a tax period.

The rules, however, did not change as they pertain to third-party token issuers. The JBA argues unrealised profit tax on third-party issuers is a barrier for domestic companies to enter the Web3 space.

Changing the Taxation Method for Individual Crypto Asset Transactions to Separate Self-Assessment taxation, Applying a Uniform 20% Rate

The JBA’s suggestions further state that losses should be carried forward and deducted in the three years after the year in which they occurred, thereby reducing tax.

Eliminating Income Tax on Profits for Every Crypto Asset Transaction/Exchange

The association opines that fostering an environment in which citizens want to invest will, in turn, increase the amount of tax the government can collect.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.