Japan’s tax authority has updated its regulations on corporate taxes, offering a tax exemption for businesses involved in cryptocurrency transactions.
Key Points
- Japan’s tax administration revises corporate tax rules, providing exemption for companies dealing with crypto.
- Unrealized gains from company-issued cryptocurrencies will no longer be taxed.
- The company must have issued the specific crypto and maintain continuous ownership of it while the crypto asset is under transfer limitations.
In a recent development, the tax administration in Japan has brought about a revision within corporate tax rules, providing an exemption to companies who deal with cryptocurrencies.
With this update, companies issuing cryptocurrencies can now expect a smoother and more favorable tax regime, which is expected to boost their operations and encourage growth in the crypto industry in Japan. This is indeed a welcome development for the crypto sector in the country, and one that is expected to have a far-reaching impact in the near future.
🚨 BREAKING 🚨
Japan’s National Tax Agency has
announced that unrealized gains from
cryptocurrencies issued by companies
themselves will no longer be taxed in
order to make it easier for crypto
companies to do business in Japan.– Coinpost
— Ash Crypto (@Ashcryptoreal) June 26, 2023
Japan Updates Tax Rules
Japan’s National Tax Agency (NTA) has recently released a notice regarding updates made to the country’s corporate tax regulations. The new regulations specify that any unrealized gains resulting from cryptocurrencies issued by companies will no longer be subjected to taxation.
The NTA stated that such coins could be excluded from the market value evaluation of a company’s assets, provided certain conditions are fulfilled. However, there are other issues that require attention. Currently, Japanese law mandates that if a company holds crypto assets, they are to be taxed as unrealized gains at the end of a tax period. This rule has been criticized for burdening crypto companies and impeding blockchain innovation. As a result, many of these companies have been relocating overseas.
This revision has come after a persistent push from the industry, and has even been included in the tax reform plan for the fiscal year 2023.To be eligible for the new tax exemption, a company must be the issuer of the cryptocurrency and hold it continuously after the issuance while the crypto asset is subject to transfer restrictions.
Tax Relief Reaction
The Japanese crypto community has welcomed this change as a way to keep crypto companies at home. However, some members, such as Sota Watanabe, founder of the decentralized blockchain platform Astar Network, have argued that the tax relief should also apply to holdings of tokens issued by other companies, to encourage the expansion of domestic projects.
This revision may mark a significant turning point for the cryptocurrency industry in Japan, and could have far-reaching implications for the global digital currency market. Only time will tell how this change will unfold and impact the industry in the long run.
