Advocates of the crypto industry in Japan are demanding a revision of the national tax regime for digital assets. The Japan Blockchain Association (JBA), a non-governmental lobbying group, filed an official request to the country’s government, highlighting three major steps to ease the fiscal burden on crypto holders.
The request was published on the association’s website on July 28. It calls the taxation of crypto assets the biggest barrier for Web3 businesses in Japan and a factor that prevents citizens from actively owning and using crypto assets. Thus, the group names three major changes that could be made to ease the pressure on the digital economy.
The first one is the elimination of the year-end unrealized gains tax on corporations holding crypto assets. Unrealized profit refers to profits that have occurred on paper but the relevant transactions have not been completed. The JBA seeks to abolish the taxes on unrealized gains in third-party-issued tokens. In June, Japan’s National Tax Agency relieved local firms from taxation of year-end unrealized gains from cryptocurrencies they had issued.
Japanese Web3 developer HashPort Group raises $8.5M in funding round
The second request deals with the taxation method for personal crypto asset trading profits. It suggests changing this method from current comprehensive taxation to self-assessment separate taxation, with a uniform tax rate of 20%. Additionally, it proposes a three-year term for deducting the losses from the digital asset’s value depreciation.
Thirdly, the JBA seeks the elimination of income tax on the profits generated each time an individual exchanges crypto assets. As the request goes:
“In the borderless web3 era, there is a high possibility that the exchange of crypto-assets will become the mainstream of the economic zone, and due to the wide variety of transactions that occur and the types of crypto-assets that are exchanged, tax calculation will be extremely difficult.”
At the end of July, Japanese Prime Minister Fumio Kishida reaffirmed the country’s commitment to fostering the Web3 industry, highlighting its potential to transform the internet and kindle social change. On the same day, Binance CEO Changpeng Zhao announced the cryptocurrency exchange would launch its services on a new Japanese platform in August.
At the time of publication, the JBA had not yet responded to Cointelegraph’s request for comment.
Collect this article as an NFT to preserve this moment in history and show your support for independent journalism in the crypto space.
‘Elegant and ass-backward’. Jameson Lopp’s first impression of Bitcoin