Japan Grants Tax Exemption on Unrealized Cryptocurrency Gains for Token Issuers
Token issuers in Japan have received a significant tax benefit as they are no longer required to pay corporate taxes on unrealized cryptocurrency gains. The National Tax Agency revised the law on June 20, enabling the tax exemption to come into effect.
The approval of this law comes nearly six months after the Japanese government initially sanctioned the proposal to eliminate the tax obligation for crypto companies to pay taxes on paper gains from tokens they issued and held.
The discussion around new cryptocurrency tax regulations in Japan has been ongoing since August of the previous year as part of wider tax reforms set for 2023. However, the tax authority has only recently given the final approval for these changes. As per the new rules, Japanese firms that issue tokens are now exempt from the standard 30% corporate tax rate on their holdings. Previously, even unrealized gains were subject to taxation.
This tax exemption marks a significant development for token issuers in Japan, offering them greater flexibility and potential for growth. By eliminating the tax burden on unrealized gains, the revised law creates a more favorable environment for cryptocurrency-related businesses in the country.