Tokens issued in Japan are exempted from the 30% crypto tax on gains

Tokens issued in Japan are exempted from the 30% crypto tax on gains

Japan’s National Tax Agency has published a partial review of its corporate tax guidelines. This revision includes new tax rules applicable to token issuers.

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According to a revision of the law by the National Tax Agency, on June 20, token issuers no longer need to pay corporate tax on cryptocurrency gains that have not been realized.

The tax exemption comes into effect almost six months after the Japanese government voted to eliminate the requirement that crypto firms pay taxes on the paper gains they made on tokens issued and held.

Since last August, Japanese legislators have discussed new crypto tax regulations as part of the broader tax reform 2023. However, the tax authority only gave the final approval to the rules this week. The new rules exempt Japanese companies issuing tokens from paying corporate tax rates of 30%. Even unrealized gains had been taxed before this law.


Law Interpretation Notification: Partial Revision of Corporate Tax. Source: National Tax Agency

The Liberal Democratic Party (LDP), the ruling party, expects “to make it easier for companies to conduct business that involves issuing of tokens.”

In recent months, the cryptocurrency industry has seen significant changes in Japan. Since June 1, has enforced stricter Anti-Money Laundering measures in order to track cryptocurrency transactions. This is to align Japan’s Legal Framework with global crypto regulations. The Financial Action Task Force found the AML legislation to be inadequate in December.

The government passed legislation in June of last year prohibiting the issue of stablecoins from non-banking organizations. The bill, which was implemented only a few weeks back, stipulates that stablecoins can only be issued by licensed banks and registered money transfer agencies.

Japan was the first country to legalize cryptocurrency as a private asset. Its regulations on crypto are some of the most stringent in the world. Japan’s financial regulator tightened regulations on crypto exchanges after Mt.Gox was hacked and Coincheck was robbed. Local regulations may have facilitated the quick return of assets for FTX users who reside in Japan after the global collapse of the exchange, as opposed to other countries where refund deadlines were unclear.

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