Japan Exempts Token Issuers from Corporate Taxes on Unrealized Crypto Gains, Boosting Crypto Sector

The National Tax Agency of Japan has announced a revision to the law, granting a corporate tax exemption to token issuers on unrealized gains from cryptocurrencies. The exemption, effective from June 20, aims to support Japan’s blockchain and crypto industries as part of the country’s push for “new capitalism,” according to Prime Minister Fumio Kishida. While crypto investors will still be subject to a maximum income tax rate of 55% on earnings over JPY200,000 ($1,797) related to cryptocurrency, token-issuing companies will no longer be liable for the standard 30% corporate tax on their crypto holdings. It’s important to note that the exemption applies specifically to companies issuing their own tokens and not to those investing in other digital currencies.

Japan already has stringent crypto regulations in place, which were further tightened after significant crypto failures like the Mt. Gox and Coincheck hacks. Japan has taken steps to enforce anti-money laundering measures aligned with global crypto standards. The recent tax exemption for token issuers has been positively received by the crypto community, as it is expected to encourage innovation and growth in the industry. Japan’s early adoption of cryptocurrencies, coupled with its regulatory framework, positions it to compete with other countries like Singapore and Hong Kong in becoming a prominent hub for blockchain technology in the future.