Deniz 
Plans for a thorough revamp of the tax code for fiscal year 2025, including clauses pertaining to crypto assets that might be taxed at a reduced rate, have been presented by Japan’s financial regulator. Japan’s Financial Services Agency (FSA) underlined crypto assets in the Aug. 30 demand for tax reform, advocating treatment of them as conventional financial assets open for public investment.
The FSA noted, “Regarding the tax treatment of cryptocurrency transactions, cryptocurrency should be treated as a financial asset that should be an investment target for the public. It is important to take this matter under view of whether it should be handled as such.”
TokenTax, a crypto accountant, claims that crypto profits are currently taxed as miscellaneous income at a rate between 15% and 55%. Although the highest rate of 55% relates to income beyond 200,000 yen ($1,377), it varies depending on the income tax category of the individual. By contrast, gains from stock trading just pay a 20% tax rate at the highest levels.
Even if they have not profited from a sale, corporate crypto holders have to pay a fixed 30% tax rate on their holdings at the end of the financial year. Requests for tax reforms made by government ministries to the ruling party are passed on to a tax system research committee and the national assembly of the nation for review. Only once authorized by both houses of the Japanese government—the House of Representatives and the House of Councilors—is the reform adopted into law.
For several years now, supporters of the crypto sector in Japan have been advocating a change of the national tax laws for digital assets. Formally, the pro-crypto lobbying group Japan Blockchain Association (JBA) asked the government in 2023 to cut the tax rate on crypto assets. In an effort to encourage even more expansion in the country’s crypto market, the group also requested tax reform on crypto assets for the 2025 financial year on July. 19.
Among its suggested rates were a three-year loss carryover deduction and a flat 20% tax rate for cryptocurrencies. Notwithstanding these initiatives, thus far the demands have not produced any industry-wide policy changes for Japan.
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