A recent move by the government to simplify crypto tax rules is awaiting approvals from the country’s parliament, after which it could benefit the crypto industry.
Tax rates for crypto holdings in Japan could see a change in the country going forward. Recent local reports stated the government in the country has amended crypto tax rules. According to the new rules, unrealized gains from crypto holdings will not witness any corporate taxes. Meanwhile, the rules need the assent of the Japanese parliament, after which they could immensely benefit the crypto industry.
With the present rules, unrealized gains of crypto holdings are subject to corporate taxes. In the process, the crypto industry may have undergone excessive taxes without even selling their digital assets.
Gaku Saito of the Japanese CryptoAsset Business Association (JCBA) stated, “Under period-end market valuation taxation, if the value of the crypto assets you own increases, you will have to pay tax even if you have not determined your profits. This is extremely difficult for a business owner to do,” in a translated version of his interview.
The move from the government has come just months after the Japan Blockchain Association lobbied for crypto tax cuts. Besides, the present rules were influencing crypto firms to move outside Japan for operations. Hence, in their appeals, the association had suggested a few pointers for the reforms in crypto taxes.
On the other hand, the government’s proactive approach to solving the crypto industry’s issues is also a good sign. If the parliament approves the new rules, the crypto industry in Japan could heavily benefit from it. Moreover, crypto adoption could also see a rise with the approvals.
In September 2023, the Japanese government also allowed firms to raise money by issuing crypto assets. Industry insiders hailed the policy move at the time.
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