The Japan Cryptocurrency Business Association (JCBA) and the Japan Cryptocurrency Exchange Association (JVCEA), the two prominent cryptocurrency advocacy groups in Japan, released a tax reform petition calling for taxes to be reduced for individual investors on the earnings of cryptocurrencies.
The 2023 tax reform request addresses key issues that advocacy groups believe act as a barrier to cryptocurrency adoption in the country.. The proposal focused on the need to improve the individual tax filing environment, the importance of crypto assets in Japan’s web3 strategy, and comparison with crypto asset tax systems abroad.
The proposal calls for a separate 20% tax on individual crypto investors with provisions to carry losses forward for three years from the following year. The proposal also calls for the same tax structure to be applied to the crypto derivatives market.
A separate 20% tax on cryptocurrency gains with an exemption on unrealized gains would be a huge relief for crypto investors in Japan, who currently face taxes of up to 55% on their cryptocurrency investments.
The tax reform proposal comes just a week after Cointelegraph reported on an internal memorandum for cryptocurrency tax reforms scheduled to be submitted to the Japan Financial Services Agency (FSA).
Japanese crypto groups have been working to ensure the crypto industry thrives in the country with a particular focus on tax reforms. These crypto lobby groups believe that a high tax rate would make it more difficult for companies and individual investors to own digital assets in Japan compared to other more crypto-friendly nations.
Cryptocurrency taxes have been the focus of various governments around the world this year, with many countries applying high tax rates, while others have decided to abolish or delay them due to a lack of clear regulations.. India imposed a 30% tax on cryptocurrency profits in April this year, while Thailand scrapped its proposed 15% tax on cryptocurrency profits and even exempted traders from 7% VAT to encourage the adoption of cryptocurrencies in the country. Similarly, South Korea postponed its 20% crypto tax policy proposal until 2025.
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