The Japan Blockchain Association (JBA) has submitted a request to the government for reform of the crypto tax system. The request calls for a review of the tax regime for crypto assets, which is hindering the growth of Japan’s Web3 businesses. The suggestions include:
- Abolishing the end-of-year unrealized profit tax levied on companies that hold crypto assets issued by third parties, to encourage new entrants into the Web3 industry.
- Implementing separate taxation and loss carryforward. The taxation method for personal crypto asset trading profits should change from general taxation to separate declaration and taxation, with a unified tax rate of 20%. At the same time, losses should be allowed to be carried forward for three years from the year in which the loss occurred, and deducted from the amount of income related to crypto assets from the next year.
- Abolishing the income tax levied on each crypto asset transaction.