Japan cuts corporate tax on unrealised crypto gains

Japan is set to change its tax regime concerning corporate cryptocurrency holdings. As per recent reports, beginning April 1, 2024, corporations in Japan will no longer be obligated to pay taxes on unrealised gains from their cryptocurrency assets. This alteration comes after the country's Cabinet approved a revision to the existing tax laws about digital assets during a meeting on December 22.

Under the previous regulations, Japanese corporations were required to report and pay taxes based on the difference between the market value and the book value of cryptocurrencies received from third parties, irrespective of whether these assets were sold. The revised policy, however, aligns the tax obligations for corporations more closely with those imposed on individual investors. Henceforth, companies will be liable for taxation solely upon realising profits from the actual sale of cryptocurrencies.

The government had initially outlined its intention to reform the tax framework for 2024 in a document released on December 14. This move aligns with earlier recommendations by Japan's Financial Services Agency, which had proposed eliminating taxes on unrealised cryptocurrency gains as of August 31.

The revised tax regulations are anticipated to foster a more conducive environment for corporations to explore ventures related to Web3 technologies within Japan. This sentiment is further underscored by recent collaborations, such as the partnership between Circle, the issuer of the USD Coin (USDC), and Tokyo-based financial services firm SBI Holdings.