According to Coinpost, the Japan Blockchain Association (JBA), represented by Yuzo Kano of trading platform bitFlyer Inc, requested the government to review the taxation system for cryptocurrencies on the 28th. He called for a review of the crypto-asset taxation system that hinders the growth of Web3 businesses in Japan and the development of an environment where citizens can own and use crypto-assets. Here are the details…
Tax system for cryptocurrencies on the agenda in Japan
The Japan Blockchain Association (JBA) has officially called on the Japanese government to review the taxation of Crypto Assets. The proposed changes aim to overcome the barriers that deter companies from entering the web3 industry and encourage wider adoption of cryptoassets among the public. If implemented, these revisions could position Japan as a developed country on the Web3, with potential economic benefits for the country’s future.
JBA’s proposal revolves around three main claims, each targeting different aspects of cryptoasset taxation. First, the association aims to abolish year-end unrealized earnings taxation on companies holding crypto assets issued by third parties. The current end-of-period mark-to-market taxation will be replaced by a system that exempts companies from taxing unrealized profits on these assets, except for short-term trading purposes. This measure is expected to lower entry barriers for domestic equity firms in the blockchain industry and encourage them to participate more actively in the web3 business environment.
What are the second and third demands?
The second request includes the revision of the taxation method for personal crypto-asset trading profits. The JBA recommends moving from existing comprehensive taxation to a separate self-assessment taxation plan with a flat tax rate of 20 percent. It also recommends applying a loss-carrying deduction for three years following a loss and allowing individuals who trade cryptoassets to deduct their losses from their crypto-asset-related income in subsequent years. This change is intended to provide fairer tax treatment for investors and traders and encourage greater participation in the crypto market.
Another vital aspect of JBA’s proposal concerns the abolition of income tax on profits from the exchange of crypto assets. With the Web3 era creating a borderless digital environment, crypto-asset exchanges are expected to play an important role in the economy. However, the multiplicity of transactions and the diversity of related crypto-assets present complex tax calculation challenges. By eliminating taxation on these exchanges, JBA hopes to increase the convenience and attractiveness of using crypto assets for transactions. The Japan Blockchain Association believes that these proposed revisions are key to unlocking the full potential of the web3 industry in the country. By creating a more conducive and supportive environment for crypto-asset businesses, encouraging wider citizen participation, and streamlining the tax framework, Japan can emerge as a key player in the global Web3 revolution.
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