Japan’s Financial Regulator Formally Proposes Crypto Tax Reduction
In a highly anticipated move, Japan’s financial regulator has proposed reducing taxes for crypto companies and individual investors, according to a recent Bloomberg report. Additionally, Japan’s Prime Minster Kishida is seeking to double the household wealth and support the country’s Web3-centered businesses.
In a bid to improve its crypto tax system, Japan’s Financial Services Agency proposed easing corporate tax rules for crypto assets as well as lighter levies for individual stock investors in support of Prime Minister Fumio Kishida’s efforts to reinvigorate the economy.
Furthermore, the FSA proposal also seeks to introduce lighter levies for individual stock investors. In the current tax break system, individuals can have a portion of their investment gains and dividends not included in the capital-gains tax over a period of time.
Companies should be exempted from paying taxes for paper gains on crypto coins that they hold after issuing them, the regulator proposed in its annual tax-code change request, according to the media giant.
Currently, in Japan, profit from cryptocurrency holdings, including unrealized gains, is subject to corporate tax of about 30%, and individual crypto investors could be taxed up to 50%.
Proposal Wants Government To Investment Limit For Retail Investors
In favour of individual crypto investors, the Japanese regulators’ annual tax-code change request seeks to implement tax breaks. The proposal wants the government to raise the investment limit for retail investors while making the tax break system under Nippon Individual Savings Account – an account that is meant to help residents in Japan save money with tax-exempt benefits- permanent.
As recently as last month, the Japan Cryptoasset Business Association and the Japan Virtual and Crypto assets Exchange Association, two of the country’s top crypto lobbying organizations, submitted a proposal to the Financial Services Agency, which aims to lower tax regulations and establish a better environment for domestic digital asset businesses.
On the Flipside
- It has been observed that corporate crypto tax in Japan has been a source of contention between regulators and players. In many cases, high taxes have been cited as the reason behind new projects migrating to friendly jurisdictions like Singapore.
Why You Should Care
Japan’s President Mikitani has been stressing the need to review the tax system, as the government intends to avoid hindering the growth of startups and prevent outflow to overseas.
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Text source: DailyCoin.com
