Japan Grants Tax Relief to Companies Holding Cryptocurrency

The Japanese government has approved revised taxation laws that provide favorable conditions for companies holding cryptocurrencies. One major change is the exclusion of year-end market value assessment taxation for corporations holding third-party issued cryptocurrency. Previously, gains or losses related to crypto held by companies were based on the variance between market value and book value at the end of the fiscal year. However, under the revised rule, this market value assessment will no longer be applied in cases of continuous crypto holding. Instead, corporations will only be taxed on profits resulting from the sale of crypto, aligning with the taxation approach for individual investors. This tax reform aims to reduce the tax burden on corporations engaged in crypto operations and is expected to stimulate domestic entrepreneurship. This move by Japan follows a trend of countries, such as Slovakia, reducing crypto taxes to attract investment. Japan’s ongoing efforts to reduce taxation also include plans to lower income tax and resident tax from June 2024 onwards. The proposed bill will be submitted for approval in January next year.