In a recent amendment to the tax law by the National Tax Agency on June 20th, token issuers in Japan have been exempted from corporate tax obligations on cryptocurrency profits.
The amendment to tax rules for cryptocurrencies has been under discussion by Japanese lawmakers since August of the previous year as part of the 2023 tax reform. The final approval from the tax authority was received this week, bringing a significant change in tax treatment for token issuers in Japan. Prior to this amendment, even unrealized profits from cryptocurrencies were subject to taxation, leading to increased financial burdens for companies operating in the crypto space.
The ruling Liberal Democratic Party (LDP) predicts that this tax exemption will facilitate the participation of various companies in token issuance and related businesses. By exempting Japanese companies from the standard 30% corporate tax on their equity in token offerings, the government aims to encourage innovation and growth in the cryptocurrency industry.
Japan’s reputation as a pioneer in the cryptocurrency field remains strong, as it was one of the first countries to legalize cryptocurrencies as a form of personal asset. The country’s regulatory framework surrounding cryptocurrencies is known to be one of the strictest in the world.
The anticipated tax exemption is expected to stimulate business activities related to token issuance, ultimately fostering innovation and growth in Japan’s cryptocurrency industry.