Japan Proposes To Ease Crypto Taxes In Aim To Strengthen Economy

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Japan’s regulator, the Financial Services Agency (FSA), is proposing to ease tax on cryptocurrencies for businesses in the country to strengthen the economy in line with Prime Minister Fumio Kishida’s vision.

Under the proposed review, the agency wants companies to be excluded from paying taxes for paper gains on cryptocurrencies they hold after issuing them, Bloomberg announced August 31.

It should be noted that the corporate crypto tax in Japan has been a source of contention between regulators and players. For example, high taxes have been cited as the reason for the inability of new projects to get off the ground in the country. Therefore, would-be crypto businesses migrated to friendly jurisdictions like Singapore.

Currently, profits from cryptocurrency holdings, as well as unrealized gains, are subject to corporate tax of around 30%.

Tax benefits for individuals

Additionally, the annual tax code amendment request from regulators seeks to implement tax breaks for individual crypto investors. The proposal wants the government to raise the investment cap for retail investors while making permanent the tax relief scheme under the Nippon Individual Savings Account.

Notably, under the current tax relief system, individuals may have a portion of their investment gains and dividends not included in capital gains tax over a given period. At the same time, the FSA proposal also aims to introduce lighter levies for individual equity investors.

Elsewhere, overhauling existing crypto laws is part of Prime Minister Kishida’s “new capitalism” vision, which seeks to double household wealth and bolster the country’s Web3-centric businesses. .

More opportunities for investors

If the plan comes to fruition, Japanese residents will have the flexibility to use their savings in other income-generating ventures, such as investing in stocks to benefit the wider economy. The country’s tax panel will review the proposals later this year.

Likewise, opportunities in the crypto space have led traditional players to choose to integrate the sector into their services to attract investors.

As reported by Finbold, Japanese banking giant Shinsei Bank has launched a new initiative to reward customers with cryptocurrency exchange coupons for opening an account with the institution.

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