As of now, crypto issuers in Japan must pay a corporation tax rate of 30% on their assets, regardless of whether or not they have made a profit from selling them.
In an effort to boost the country’s financial and technological industries, the Japanese government is planning to reduce tax requirements for domestic crypto businesses.
There is now a 30% corporation tax rate on cryptocurrency holdings that must be paid by Japanese enterprises that issue a cryptocurrency, regardless of whether or not they have made a profit from selling their assets. In response, it has been claimed that a number of initially U.S.-based crypto/blockchain enterprises and related personnel have relocated internationally in recent years.
The tax committee of Japan’s governing Liberal Democratic Party (LDP) met on December 15 and unanimously accepted a proposal that would exclude crypto businesses from paying taxes on paper profits from tokens they have issued and owned. The proposal had been introduced in August.
The more lenient crypto tax laws will be introduced to parliament in January and implemented for Japan’s next fiscal year on April 1.
An LDP legislator and Web3 policy office member named Akihisa Shiozaki told Bloomberg on December 15 that “this is a very major step ahead” and that “it will become simpler for different organisations to conduct business that includes issuing tokens.”
Despite the FTX debacle, the government’s new step suggests that it is still eager to encourage and expand the domestic crypto and Web3 industry.
Nonfungible tokens (NFTs), blockchain, and the metaverse were all mentioned by Prime Minister Fumio Kishida as having significant roles in Japan’s digital transformation. The PM used the example of the digitalization of national identification cards.
After being urged to do so by Kishida in June, the Japan Virtual and Crypto Assets Exchange Association stated in October that it will relax its strict screening procedure for launching new tokens on exchanges.
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Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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