Token issuers in Japan no longer have to pay corporate taxes on unrealized cryptocurrency profits, according to for the revision of the law by the National Tax Office on 20 June.
The tax exemption will take effect nearly six months after the Japanese government approved the proposal canceling the requirement for crypto firms to pay taxes on paper profits from the tokens they issued and held.
Lawmakers in Japan were discussion of new crypto tax rules since last August as part of the wider tax reform for 2023, but the tax office only gave final approval this week. Under the new rules, Japanese companies issuing tokens are exempt from paying a fixed 30% corporate tax rate on their assets. Before this law, unrealized profits were also subject to taxation.
The ruling Liberal Democratic Party (LDP) expects to “make it easier for various companies to do business that involves issuing tokens.”
The cryptocurrency industry in Japan has been undergoing significant changes recently. From June 1, the country was enforcement of stricter anti-money laundering (AML) measures. monitor cryptocurrency transactions and align the Japanese legal framework with global crypto regulations. Lawmakers revised anti-money laundering legislation in December after it was found insufficient by the Financial Action Task Force (FATF).
In June last year, the government approved the law ban on issuing stablecoins by non-banking institutions. The bill – implemented just a few weeks ago – stipulates that the issuance of stablecoins in the country is limited to licensed banks, registered money transfer agents and trust companies.
Japan was one of the first countries to legalize crypto as a form of private asset and its crypto regulations belongs to the strictest in the world. After Mt.Gox and Coincheck were hacked, Japan’s financial regulator tightened rules for crypto exchanges. Local regulations are believed to have facilitated the speed return of assets to FTX users in Japan after the global stock market collapse, unlike users in other countries without a clear deadline for refunds.
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