With the new policy, companies holding crypto assets will only be taxed when selling crypto at a profit, "holding" will not be taxed.
Japan proposes not to collect crypto taxes without "taking profits"
According to local media CoinPost , the Japanese Government has approved a tax policy revision for 2024, businesses that own cryptocurrencies issued by third parties will only be taxed when taking "profit taking" actions. .
Currently, companies that hold cryptocurrencies issued by third parties are taxed as the value of these assets increases/decreases based on the difference between the year-end financial statements and the time of year-end purchases, even though they "Take profit" or "cut loss" has not been implemented.
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— CoinPost（仮想通貨メディア） (@coin_post) December 23, 2023
The 2024 tax policy amendment will allow businesses to be taxed only on profits from selling cryptocurrencies, avoid being subject to wealth growth taxes, and hold crypto long-term.
However, the 2024 revised tax policy is still in proposal stage, needing to be approved by the House of Representatives and the Senate during the regular session of the National Assembly scheduled for January 2024 .
The potential change in tax policy comes after the Japanese Taxation Agency announced revisions to its corporate tax guidelines in June 2023, according to which Token Issuance in Japan will not be taxed on Unrealized profits (paper profits).
Before the amendment, Token Issuance in Japan had to pay 35% corporate tax on unrealized profits for Token holdings. Japan will then collect taxes based on their market value at the end of the tax period.
Over the past year, Japan has rolled out many crypto-friendly policies , such as funding metaverse and Non-Fungible Token projects , lifting the ban on stablecoins issued outside the country , and allowing Raise Capital with crypto .
Since then, a series of organizations have begun to target this market, for example Binance intends to issue stablecoins ; Animoca Brands cooperates with Cool Cats to cover Web3 ; Osaka Exchange launches the first “security Token ” trading platform ; Japan's largest investment bank Nomura launches Bitcoin fund .
Japan's "friendly" cryptocurrency regulatory actions have led Binance to try to "re-enter" this market through the acquisition of 100% of Sakura Exchange BitCoin (SEBC) , after 2 years. was caused legal difficulties by the Japan Financial Services Agency (JFSA) when operating without a license in June 2021.
Therefore, the latest action of the Japanese Government is expected to create growth momentum for the market in the near future, while also contributing to stimulating the development of the global crypto ecosystem.
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