Japan’s Financial Services Agency and Ministry of Economy are preparing for a new cryptocurrency regulation. Accordingly, the two organizations will review corporate tax for crypto companies from 2023. The event is interpreted as the rules that negatively affect crypto companies in Japan will change.
New cryptocurrency regulation from Japan
The Japanese government has announced that it will begin reviewing crypto tax rules for companies from 2023. According to local media outlets, the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) will jointly carry out the arrangement. Accordingly, regulators will review how taxes will be imposed on businesses using crypto “to support startups.” The report also examines projects that raise funds by issuing tokens.
Regulators are talking about how crypto companies will be taxed in the new system. Accordingly, crypto companies will only have tax liability when profits are made from sales. This seems to support crypto startups in the country as it only depends on profit. Regulators approve of this, too. He says they don’t want to hinder the growth of startup crypto companies and won’t deter them from working in Japan.
Crypto companies are exiting Japan
The report quotes Rakuten Group President Hiroshi Mikitani, who noted that crypto businesses are moving to places like Japan. Mikitani supports the government’s latest move because starting a business in Japan is stupid. According to him, many crypto companies operate in countries like Singapore and UAE due to more favorable regulations. Liberal Democrat Party member Taira Masaaki also posted an announcement on Twitter, acknowledging that the companies are leaving the country. Masaaki calls himself “Web3 Project Team Head”.
Crypto advocates in Japan called for tax cuts in July 2022 to stop the talent migration Mikitani mentioned. As Cryptokoin.com reported, Japan currently imposes a 30% corporate tax on cryptocurrencies. Experts believe that this will lead to a brain drain in the country. Those calling for these changes also say Japan is not an easy place to do business. The new regulation in 2023 seems to be prepared to prevent this.
Cryptocurrency companies want taxes to be lowered
Crypto groups in Japan have also released their “tax reform request for 2023” demanding a 20% tax rate. These groups identified several issues with crypto regulation in the country. These were the lack of consistency within the system, the need to create a Web 3.0 entity, and the facilitation of tax filing.
Japan’s company METI has created a web3 policy proposal to better organize this effort. However, one of the country’s largest banks, Sumitomo Mitsui Banking Corporation, has also announced that it will enter NFTs and Web3. Other, Japanese trust banks have also received approval to manage crypto assets this year.
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