Token issuers in Japan are now exempt from paying corporate taxes on unrealized cryptocurrency gains, according to a partial revision of the country’s corporate tax guidelines by the National Tax Agency. The new rules, which became effective on June 20, eliminate the requirement for Japanese firms issuing tokens to pay a set 30% corporate tax rate on their holdings, including unrealized gains. The move is part of a broader tax reform for 2023 and aims to make it easier for various companies to do business that involves issuing tokens.
The cryptocurrency industry in Japan has been undergoing significant changes, including the enforcement of stricter Anti-Money Laundering (AML) measures since June 1. Additionally, the government passed legislation last year prohibiting the issuance of stablecoins by non-banking institutions, limiting stablecoin issuance to licensed banks, registered money transfer agents, and trust companies. Japan’s crypto regulations are among the strictest in the world, following high-profile hacks of Mt.Gox and Coincheck, which prompted the tightening of rules on crypto exchanges.
Overall, the tax exemption for token issuers in Japan is a positive development for the country’s crypto industry as it could encourage more innovation and growth while alleviating some of the tax burden associated with holding cryptocurrencies. However, it remains to be seen how this will affect the broader taxation landscape for cryptocurrencies in Japan and whether other countries will follow suit.