Japan strives for "three consecutive years of reform" in crypto-friendly tax system, as JCBA and JVCEA work together to reduce personal crypto taxes.

CoinDesk Japan reports that the number of cryptocurrency accounts, referred to as "cryptographic assets" in Japan, has exceeded 10 million, meaning that approximately 1 in 10 people in Japan owns cryptographic assets. This signifies the widespread adoption of cryptocurrencies in Japan, and the industry is actively reforming related tax laws.

Reform of the Current Corporate Tax System

Regarding corporate taxes, both self-owned and third-party held portions are no longer subject to year-end market value assessment for taxation, following two consecutive years of reform. The Japanese National Tax Agency has relaxed cryptocurrency taxes, with conditions for tax exemption on "unrealized profits" for businesses.

Issues with Personal Income Tax and Its Impact

However, in terms of personal income tax, cryptocurrency is still treated as miscellaneous income and taxed at a maximum of 55%. The Japan Cryptocurrency Business Association (JCBA) and the Japan Virtual Currency Exchange Association (JVCEA) believe that this high tax rate is a major obstacle to the widespread adoption of crypto assets.

Industry Groups' Demands for Tax Reform

The Japan Virtual Currency Exchange Association (JVCEA) and the Japan Cryptocurrency Business Association (JCBA) issued a " 2025 Tax Reform Proposal" on July 30 and submitted it to relevant authorities.

Main Points of the Proposal

• Income Tax: Reevaluate income classification and separate taxation, establish a tax system that reflects the actual situation of crypto assets, 20% separate taxation for declared income and loss carryover deduction (3 years), same treatment for crypto asset derivative trading
• Income Tax: Gifts, tax system should not hinder donations of crypto assets
• Asset Tax: Include inherited crypto asset transfer income in the acquisition fee surcharge exception, inheritance property valuation can choose the lowest average market price in the past 3 months
• Exchange between Crypto Assets: Abolish taxation when exchanging crypto assets and tax only when exchanged for legal tender

However, the consecutive two-year tax reform for virtual currencies has also sparked protests from other industry groups who question why specific industries are being favored. Some believe it may not be possible to receive favorable policies for a third year. Taxation is a crucial system supporting the country, and reform is not easy. Nonetheless, in order to achieve the widespread adoption of Web3, businesses still hope to see "consecutive three-year" tax reforms.