Japan will review corporate tax rules for crypto companies from 2023
The Japanese government’s Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) will review corporate taxation for crypto companies from 2023.
The Japanese government has announced that it will begin revising crypto tax rules for companies from 2023. Local media reported that the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) would consider how tax companies which uses crypto “for the purpose of nurturing startups.”
The review focuses on crypto startups that issue tokens to raise funds that are then used to build the business. Regulators say the new system will consider whether companies owning crypto assets will only be taxed when profits are generated from sales. They also say the agencies do not want to hinder the growth of startups and discourage them from working in Japan.
The report quotes Rakuten Group chairman and president Hiroshi Mikitani, noting that crypto businesses are moving to places like Japan “because it’s stupid to start a business in Japan.” Many crypto companies operate from countries like Singapore and the United Arab Emirates due to the more accommodating regulation.
Member of the House of Representatives and the Liberal Democratic Party Taira Masaaki also acknowledged the development on Twitter. Masaaki calls himself “Web3 Project Team Chairman.”
Crypto advocates in Japan have called for tax cuts in July 2022 to stop the talent exodus Mikitani referred to. Currently, Japan has imposed a 30% corporate tax on cryptocurrencies, and they believe that this will lead to a brain drain in the country. Those calling for these changes also said that Japan was not an easy place to do business.
Crypto groups in Japan have also released a tax reform request for 2023, calling for a 20% tax rate. The problems they identify are a lack of consistency in the system, the need to establish a web3 presence and facilitation of tax filings.
Japan’s METI has also established a web3 policy offer to better organize and manage this new effort. One of the country’s largest banks, Sumitomo Mitsui Banking Corporation, has also announced a foray into NFTs and web3. Japanese trust banks have also received approval to manage crypto assets later this year.
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