Japanese Crypto Companies to Maintain Push for Tax Reform
Tim Alper
Last updated:
June 19, 2024 19:30 EDT
|
2 min read
Leading Japanese crypto companies, including major cryptocurrency exchanges, have announced that they will continue to urge the government in Tokyo to reform the nation’s stringent tax laws.
In a recent post by the official Japan Blockchain Association (JBA) on June 17, Yuzo Kano, the CEO of the long-standing market leader bitFlyer Holdings, stated that the organization will focus on introducing new tax measures over the next year.
Japanese Crypto Firms Advocate for Tax Reform for Individual Traders
Unlike many other countries that require crypto traders to pay a fixed-rate capital gains tax on their annual earnings, Japanese law mandates that traders report their profits from cryptocurrency as “other income” on their tax returns.
This means that high-earning individuals may be subject to a tax rate of up to 55% on their crypto earnings, while the average global headline capital gains tax rate, according to PwC data, stands at around 20%.
The JBA consists of the majority of Japan’s largest and most well-known cryptocurrency exchanges and blockchain-related companies.
During a meeting held on June 17, Kano was reappointed as the chair of the JBA. Other notable members of the board of directors include Tatsuto Fujii from Mizuho Financial Group and the CEOs of the crypto projects double jump.tokyo and Startale Labs.
Trading volumes on the bitFlyer crypto exchange over the past seven days. (Source: CoinGecko)
JBA Aims for Further Progress in Tax Reform
Kano stated that the JBA will appeal to the government in Tokyo to “change the taxation method for individual cryptocurrency transactions and implement separate self-reporting taxation.”
He also proposed setting the tax rate at a flat 20%. Additionally, Kano expressed his desire to eliminate income tax on profits made from crypto-to-crypto trades.
In many other countries, only crypto-to-fiat trades are subject to taxation.
The JBA also hopes that the government will allow individual crypto traders to carry forward their losses on their tax returns. Furthermore, the association is calling for the government to reform its restrictive leverage ratios cap for crypto trading.
Established in 2014, the JBA will celebrate its 10th anniversary in September of this year.
Kano emphasized that the efforts of the JBA have already played a role in reforming crypto tax rules for corporations. Last year, the government in Tokyo effectively agreed to eliminate taxes on unrealized “paper” crypto gains for businesses that hold tokens.
Kano stated:
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