Japanese Government to Scrap Corporate Tax on Unrealized Crypto Gains

In Japan, the government wants to go ahead with tax reform to scrap payments of taxes on unrealized gains from crypto holdings. This comes following a report that the cabinet approved a revision to the countrys tax regime for digital assets.

Local reports revealed that the government came up with new tax reform a few days ago with the aim of possibly implementing the changes when the countrys financial year starts on April 1, 2024.

They need to submit the bill to lawmakers next month for the approval of the House of Representatives and the House of Councilors. Before the introduction of the changes, corporations were required to report cryptos held based on the difference between market value and book value, without regards to whether they sold the crypto.

The reform stipulates that they will only pay taxes on profits obtained whenever they sell cryptocurrencies, the same as what retail investors are required to do according to tax laws. The tax reform details were revealed in a document published by the government about two weeks ago.

About four months ago, Japans Financial Services Agency first submitted a plan to scrap unrealized gains tax on crypto profits. Scrapping the tax rules may encourage more firms to engage in activities related to Web3 in the country.

USDC issuer Circle has collaborated with Japan-based financial services company SBI Holdings to enhance stablecoin adoption and Web3 services in the country.