The Japanese government has approved a tax reform that removes some crypto taxes for corporations and conglomerates. The reform, discussed since early December, removes the unrealized gains taxes on crypto holdings for companies, paving the way for them to hold crypto assets more consistently.
Japanese Government Approves Tax Reform to Eliminate Unrealized Gains Tax
The Japanese cabinet convened to approve the FY2018 tax reform, which includes a series of modifications to rules affecting companies in the cryptocurrency area. The reform included a change that removed the “unrealized gains” crypto tax that mandated companies to pay tribute based on the price change of crypto assets each fiscal year.
A change that eliminated this tax for companies’ self-issued cryptocurrencies had already been approved earlier this year, but with this modification, crypto companies can now hold crypto issued by third parties without paying the unrealized gains taxes.
However, cryptocurrency sales and purchases will continue to be taxed. This opposes the petition of the Japan Crypto Asset Business Association, which asked for eliminating the tax on crypto exchanges. According to local media, the measure will contribute to a general reduction in tax-derived income for June 2024, expected to be the largest since 1989.
The reform, which had been in discussion since early December, is directed to make it easier for corporations to add crypto to their treasury without paying for simply holding it. Japan is one of the few countries that applies this unrealized crypto gains tax, prompting companies to hold these assets in other countries.
Nonetheless, even after this approval, the tax reform will have to be presented to the Diet next year and will have to be passed by both houses.
What do you think about the unrealized gains crypto tax exemption for companies in Japan? Tell us in the comments section below.
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