Japan’s crypto business association recommends tax change. Its members believe that current tax restrictions stifle the Web3 economy and deter taxpayers from embracing cryptocurrencies.
The Japan Blockchain Association (JBA) has asked the Tokyo government to change the taxation on virtual currency. Yuzo Kano, co-founder and CEO of Japanese crypto exchange Bitflyer, claims that the suggested revisions would allow more domestic enterprises to enter Web3.
The JBA wants a review of the crypto asset taxation system, which it says is hindering Web3’s growth in Japan, and an environment where citizens can own and use digital assets, Coinpost reported Saturday.
Japan’s National Tax Agency (NTA) revised corporate tax laws last month to exempt corporations from taxing year-end unrealized profits from cryptocurrencies they issued. The group now wants unrealized profits from tokens issued by third parties to be excused, stating this burden is a Web3 market entrance barrier.
Companies will no longer need to sell tokens for tax purposes if the end-of-term unrealized gain tax is eliminated. Under the existing tax structure, selling tokens to pay taxes could lower their price, which could slow the token-based economy’s growth, the JBA said.
The organization also proposes self-assessment taxation with a 20% flat rate for crypto asset transactions. The group also advocates carrying losses forward and deducting them in the three years after they occur to lower taxes.
The Japan Crypto Asset Trading Association reported that more Japanese people are creating crypto asset trading accounts. 6.8 million in April 2023. In its own survey, over 44% stated they would more than treble their investments if they switched to self-assessment taxation.
The business group also wants Japan to eliminate income taxation on crypto asset trading revenues. The JBA believes these revisions would increase crypto users, crypto asset investments, and Japan’s tax revenue.
