Request for Tax Reform Regarding Crypto Assets (FY2023)
1: Abolition of end-of-term unrealized gain taxation on corporations that issue and hold crypto-assets, 2: Introduction of separate self-assessment taxation and loss carry-over deductions, 3: Abolition of taxation when crypto-assets are exchanged.
The Japan Blockchain Association (located in Minato-ku, Tokyo; Representative Director: Yuzo Kano; hereinafter referred to as JBA) submitted a request to the government to revise the taxation system for crypto-assets on Tuesday, November 15th. .
Purpose of request
This request seeks to review the taxation of crypto-assets, which is the biggest barrier for corporations to run web3 businesses in Japan, and a factor that prevents citizens from actively owning and using crypto-assets. increase. We hope that Japan will be recognized both domestically and internationally as a leading web3 country, and that the economic sphere of the new web3 industry will expand, contributing greatly to the future growth of the Japanese economy, which is under pressure to change.
Current situation in Japan
Considered as the next-generation Internet, web3 is expected to have the potential to drive economic growth not only in Japan but also in the world. Wealth ranking ranks 27th out of 56 countries surveyed. In particular, the tax system scored poorly, and in another report*2, it ranked 58th out of 61 countries, which is close to the bottom. *1 https://coincuba.com/ranking/q3-2022-global-crypto-ranking/ *2 https://coincuba.com/ranking/coincuba-annual-crypto-tax-ranking-2022/ [Image 1
In order to improve this business environment, JBA has requested the following revisions to the tax system.
Request 1: Abolishment of year-end unrealized profit taxation on corporations that issue and hold crypto-assets
Abolish taxation on crypto assets other than short-term trading purposes held by the corporation that issued or acquired crypto assets, instead of taxation based on market value at the end of the term, as valuation based on book value. In particular, we will abolish the end-of-term unrealized profit taxation on self-issued tokens, which is a factor in the outflow of multiple companies overseas, and prevent the outflow of web3 human resources overseas and quickly develop an environment in which web3 businesses can be operated in Japan.
Request 2: Introduction of separate self-assessment taxation and loss carry-forward deduction
Change the taxation method for profits related to crypto-asset transactions from comprehensive taxation to separate self-assessment taxation, with a uniform tax rate of 20%. In addition, for three years after the year of loss, carry forward the loss and deduct it from the income related to crypto assets from the next year onwards. The same shall apply to crypto asset derivative transactions.
Request 3: Elimination of taxation when exchanging crypto-assets When crypto assets are exchanged, income tax is levied on the profits generated each time they are exchanged. In the borderless web3 era, there is a high possibility that the exchange of crypto-assets will become the mainstream of the economy, and due to the wide variety of transactions that occur and the types of crypto-assets that are exchanged, tax calculation will be extremely difficult. It becomes complicated, and it significantly hinders the convenience inherent in crypto-assets. Therefore, abolish taxation on the exchange of crypto assets.
Request form download
https://jba-web.jp/cms/wp-content/uploads/2022/11/20221116_jbazeisei.pdf [Image 2
JBA will continue to work on improving the environment for promoting web3. that’s all
Details about this release: