Japan’s main financial regulator, the Financial Services Agency (FSA), has decided to take cryptocurrency regulation into its own hands by proposing changes to tax laws on digital assets.
according to In response to local media reports, the FSA submitted a request on August 31. The most notable proposal in the 16-page document is to exempt domestic companies from end-of-year “unrealized gains” tax on cryptocurrencies. While some domestic laws require corporations to pay taxes only after their crypto assets have been sold to fiat currency, in Japan they are taxed regularly each year.
The amendments proposed by the FSA may be accepted because the FSA says the Ministry of Economy, Trade and Industry has already supported them.
As explained in the FSA’s release, the reforms will “develop an environment for promoting Web3 and promote entrepreneurship using blockchain technology.”
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Defenders of the Japanese crypto industry have been calling for changes to the country’s tax system for digital assets for some time. At the end of July, the Japan Blockchain Association (JBA), a non-governmental organization, urged the Japanese government to make three major changes to cryptocurrency regulations.
The first was to eliminate the year-end unrealized profits tax on companies holding crypto assets. The other two are to switch individual crypto asset transaction profit taxation to a uniform 20% self-assessment separate taxation, and to exempt income tax on profits generated each time an individual exchanges crypto assets.
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