The Japanese government intends to ease the tax burden on local crypto firms and exclude paper profits from the tax base.
In the middle of this year, the Japan Crypto Asset Business Association (JCBA) and the Japan Virtual and Crypto Asset Exchange Association (JVCEA) petitioned the Financial Services Agency (FSA) to reduce the tax burden of local cryptocurrency companies.
The initiative group has asked the regulator to exclude taxation of paper profits from cryptocurrency assets if firms own them for purposes other than short-term transactions. Currently, profits from such holdings, including unrealized gains, are subject to corporation tax at a rate of around 30%.
Japan’s ruling party, the Liberal Democratic Party (LDP) Tax Committee, held a meeting on December 15 and approved an FSA proposal that would remove the requirement for crypto companies to pay taxes on fiat profits from crypto assets.
The new cryptocurrency tax rules are expected to be submitted to the Japanese Parliament for approval in January and, if approved, will come into effect in the next fiscal year starting April 1.
Earlier, the Japan Financial Services Agency (FSA) demanded that the Japanese branch of the FTX exchange suspend all over-the-counter derivatives transactions in order to protect the interests of investors and creditors.