Token issuers in the country were taxed for unrealized gains from holding on their own tokens.
Japan’s National Tax Agency has clarified that crypto issuers in the country will not have to pay capital gains taxes on unrealized gains, in a June 20 notice.
The country’s ruling Liberal Democratic Party (LDP) tax committee approved a proposal to exempt crypto startups that issue their own tokens from paying corporate taxes on unrealized gains last December.
Japan has been reviewing its tax treatment of crypto since at least last year to encourage startups to remain in the country after heavy tax burdens seemingly led to a company exodus.
The partial revision noted in the June 20 document is a change from an earlier requirement that subjected token issuers to a capital gains tax of around 35% on their own tokens – as well as on unrealized gains.
The tax exemption will also apply to unrealized gains from holding applicable cryptocurrency continuously from the date of issuance or from taking certain technical measures to prevent its transfer to other persons, the document said.
Japan’s industry associations have also sought other tax reforms, including for crypto gains to be taxed at the same rate as stocks and for individuals to be taxed only when crypto gains are converted to fiat currency.
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Source: Vietnam Insider