Japan considers implementing tax reforms to prevent capital flight of crypto startups
2022.08.25 23:41
Japan considers implementing tax reforms to prevent capital flight of crypto startups
According to local news outlet Yomiuri, Japan’s Financial Services Agency is considering amending the virtual currency taxation system for corporate entities ahead of the country’s 2023 tax reform. The proposed change includes removing capital gain liabilities for undisposed corporate crypto assets at the end of each taxation year, as well as changing the classification of virtual assets so the maximum capital gains tax applicable is reduced to 20% from 55%.
Under Japan’s current taxation laws, unrealized capital gains on virtual currencies are recognized as income at the end of each fiscal year (on March 31), resulting in income tax liabilities. In addition, both individual and corporate crypto earnings of over 200,000 JPY ($1,463) in any given fiscal year are classified as “miscellaneous income,” which is taxed at a rate ranging from 15% to 55%, with the local inhabitant’s tax rate included. In comparison, profits earned from stock and forex trading are only subjected to a tax of 20% at the highest levels.
