Japan Adopts Tax Reform for Crypto Assets
Summary
The Japanese government has adopted tax reform for crypto assets, which will come into effect in fiscal year 2024. This change will impact corporations owning virtual currencies issued by third parties by exempting them from the period-end mark-to-market valuation tax. The purpose of this adjustment is to ease the tax burden for businesses and align their tax treatment with individual investors. The move has been welcomed by the Japan Crypto Asset Business Association (JCBA) and is expected to promote the growth of local firms utilizing blockchain technology.
Introduction
The Japanese government has announced tax reform for crypto assets, specifically targeting corporations holding virtual currencies issued by third parties. This reform aims to simplify the tax payment process and align the tax treatment of businesses with that of individual investors. The change comes after the Japan Crypto Asset Business Association (JCBA) advocated for this tax adjustment.
Main Points
- Corporations owning virtual currencies issued by third parties will no longer be subject to the period-end mark-to-market valuation tax.
- Similar to individual investors, businesses will only pay taxes on the profits made from selling virtual currencies and tokens.
- The adjustment aims to make it easier for companies to pay taxes on their crypto assets.
- The change will impact the Corporation Tax Law’s period-end mark-to-market calculation.
Conclusion
The adoption of tax reform for crypto assets in Japan is a significant development for businesses holding virtual currencies issued by third parties. The reform will relieve the tax burden on these corporations and bring their tax treatment in line with individual investors. The change was initiated by the Japan Crypto Asset Business Association (JCBA) and is expected to support the growth of local firms utilizing blockchain technology. This reform demonstrates Japan’s commitment to fostering a favorable environment for the crypto industry.