Top cryptocurrency news: Japan’s crypto groups call for an end of taxing paper gains

28-Jul-2022 By: Shikha Jha

Japan's major crypto lobbying groups intend to present a proposal to the country's financial regulatory body to address the country's high crypto taxes, which experts say make Japan less competitive as a crypto hub.

According to a local media outlet, the proposal will be presented to Japan's Financial Services Agency (FSA) this week, urging them to “stop taxing unrealized gains on cryptocurrency holdings if the business owns them for reasons other than short-term transactions.”

The proposal also urges the financial regulator to reduce income tax rates on crypto earnings for individual investors to 20%, which is significantly lower than the current rates, which tax some investors up to 55%.

Head of Tax (APAC region) Danny Talwar of crypto tax platform Koinly told sources that the present legal framework makes it harder for enterprises and individual investors to hold digital assets in Japan compared to other crypto-friendly nations:

“Japan's high crypto tax rates make it less competitive on the world stage when compared to nations like Singapore and Dubai, which are rapidly becoming commercial centers for digital assets.”

Talwar further stated that “taxing unrealized capital gains might result in instances where taxes paid are not proportionate to the asset value on realization, which is especially prevalent in volatile asset classes.”

The FSA's endorsement of the proposals, according to Talwar, would be a step forward for crypto-friendly legislation in Japan, while the actual wording of the proposal remains unknown.

Masaaki Taira, a Japanese politician, also argued that “lawmakers should relax crypto regulations to stem the outflow of digital talent.”

The proposal is apparently being prepared by the Japan Cryptoasset Business Association and the Japan Virtual & Crypto Assets Exchange Association, whose members include Bitcoin Association and forex broker WikiFX.

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