Crypto groups in Japan release request for 2023 tax reform
The Japan Crypto-Asset Business Association (JCBA) and the Japan Crypto-Asset Exchange Association (JVCEA) have published a tax reform request for 2023. The request calls for separate taxation of crypto at a rate of, among other things, 20%.
The Japan Crypto-Asset Business Association (JCBA) and the Japan Crypto-Asset Exchange Association (JVCEA) have jointly released a tax reform request for cryptoassets. The request for tax reform for 2023 talks about several issues, which the two groups see as an obstacle to growth in the industry.
These issues include the need to simplify tax filings, lack of consistency in the system, comparison with foreign tax systems for cryptoassets, and the importance of cryptoassets in Japan’s web3 strategy. The latter appeared to be a key point in the tax reform request, with Gaku Saito, chairman of the Tax System Study Group, saying:
“If the Japanese government makes Web 3.0 a national strategy, the frequency with which the public will come into contact with cryptoassets will inevitably increase dramatically … making it easier to hold will lead to the spread of Web 3.0 and contribute to the development of the market .”
The request calls for separate taxation of crypto at a rate of 20%, with a loss that can be carried forward from the amount of income related to crypto assets for three years from the following year. This will also apply to derivative transactions.
Let the industry flourish
Crypto advocacy groups in Japan have been working hard lately to ensure that the crypto industry can flourish. These groups have recently petitioned the government to relax corporate tax rules, fearing it would lead to an exodus of talent. The groups also want to reduce the current tax rate on individual investors from up to 55% to 30%.
Existing financial institutions are also starting to take note of crypto. In July 2022, it was revealed that Japanese trust banks could get the green light for crypto custody, as the FSA aims to strengthen investor protection by deregulating trust banks.
Encryption tax is reflected everywhere
Many countries are wondering how to deal with the issue of taxation of the crypto asset class. Notably, South Korea delayed its crypto tax plans again, pushing it back to 2025. Other countries such as India have introduced harsh tax rules that have caused trading volumes to plummet.
Investors will have to deal with crypto taxation sooner or later, as the asset class becomes more widespread. This together with general regulation will cause some difficulties in the short term, but will legitimize the market.
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