Japan Nearing Comprehensive Cryptocurrency Tax Reform
(MENAFN- CoinXposure)
According to the document, The proposed reform has been approved by the Ministry of Economy, Trade, and Industry.
The unique taxation framework for crypto assets, also known as virtual currency, necessitates changing corporate tax regulations.
The persistent concern of urging the government to continually evaluate the imposition of year-end mark-to-market taxation on“crypto assets held by third parties” has been an issue for a long time.
The Japan Blockchain Association (JBA) presented a tax reform petition to the government in July, which included a request for tax reform regarding crypto asset held by third parties.
Under this proposed tax reform, companies would be required to pay taxes on unrealized gains, representing the increase in token value, at the end of each fiscal year.
This provision has prompted concerns in the cryptocurrency industry because it requires companies to pay taxes even if they have not liquidated or converted their cryptocurrency holdings into fiat currency.
The proposed tax reform intends to align Japan's taxation approach with other nations, in which companies are exclusively taxed when they sell or exchange cryptocurrencies for fiat currency.
See alsoCongress Exposes Tax Evasion in the Cryptocurrency Industry 3 months ago
This change is expected to reduce the tax burden on cryptocurrency businesse and stimulate the development of the Japanese cryptocurrency industry.
The and the Ministry of Economy, Trade, and Industry are anticipated to continue collaborating with the government to effectuate the proposed tax reform regarding crypto assets held by third parties.
This strategic step could increase Japan's allure as a destination for cryptocurrency companies and investors.
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