Japan Looks at Corporate Crypto Tax Breaks to Entice Startups: Report
Japan is set to review existing corporate crypto tax rates in an effort to entice startups to remain in the country, local news outlet Yomiuri reported on Wednesday.
- Japan's financial services agency (FSA) and the ministry of economy, trade and industry are considering a tax reform proposal for 2023 that could exempt crypto startups that issue their own tokens from paying taxes on unrealized gains.
- Under the current system, startups that issue their own tokens must pay taxes on unrealized gains for the tokens they might be holding on to because the company's holdings are taxed based on the market value at the end of the taxation period, according to Yomiuri.
- The potential tax reduction is aimed at encouraging startups to remain in Japan. CoinDesk reported in December 2021 that heavy tax burdens may be causing crypto firms to quit the country altogether.
- Japanese lawmaker Taira Masaaki appeared to confirm the tax review on Twitter.
- Earlier this month, two crypto lobby groups in the country, the Japan Crypto-Asset Business Association (JBCA) and the Japan Crypto-Asset Exchange Association (JVCEA), asked the government to consider lowering crypto taxes, including a proposal for a 20% capital gains tax for retail investors.
- Currently, investors in Japan are taxed up to 55% on capital gains.
Read more: Japan’s Taxes on Crypto Firms Are Leading Some to Leave the Country