Japan’s financial regulator may cut crypto taxes in fiscal 2025: details
Japan’s Financial Services Agency (FSA) wants to treat cryptocurrencies like traditional assets like stocks and gold. As part of this effort, the FSA has lowered tax rates on income from crypto activities. Corporate crypto holders will face slightly higher rates, while small individual investors will benefit from comparatively lower taxes.
The FSA recently published a report official paper in Japanese, with proposals to reform the overall tax system for the 2025 budget year. Japanese publication Coinpost explained the development that indicates that the Web3 industry in Japan is asking for tax changes.
Currently, crypto income in Japan is taxed at 15 to 55 percent. However, in FY 2025, authorities plan to reduce the tax rate to a flat rate of 30 percent for corporate investors and 20 percent for individual investors.
The FSA is also working on finalizing the extent to which virtual digital currencies (VDAs) can be treated as financial assets in terms of investment purposes. Depending on this, Japan will either join the US and Canada in the crypto ETF game or choose to stay out of it for now, the Coinpost report said.
In Japan, the number of crypto owners rose from 6.4 million in 2022 to 8.82 million in 2023, according to StatisticsIn July 2023, Japanese Prime Minister Fumio Kishida promised citizens that the country would make Web3 the new form of capitalism.
Shortly after, Binance re-entered the Japanese market and Japanese e-commerce giant Mercari announced that it would offer BTC payments to over 20 million users.
Against the backdrop of these developments, it seems logical that Japan is considering lowering crypto taxes, in order to encourage the investment community to cooperate with VDAs and contribute to stabilizing the sector and its growth.
Japan’s discussions on cutting crypto taxes have received praise from India’s Web3 community, which is also pushing for crypto tax reform.
:rotating_light: The Japanese :jp: government is considering changing the current 55% top tax rate for cryptocurrencies to a flat 20% tax rate in response to investor feedback.
Koi:flag-in: India me bhi aisa Karlo:smiling_face_with_tear:
30% TAX on 1% TDS the padta hai:shrug::skin color-2: photo.twitter.com/h9vsIsprM1
— Ajay Kashyap (@EverythingAjay) September 3, 2024
In India, crypto profits are currently taxed at 30 percent, with an additional one percent TDS on every crypto transaction. These tax rules were implemented on April 1, 2022. Members of the Indian crypto community have been calling for a review and have urged the Ministry of Finance to reduce the TDS rate to 0.01 percent.
Unlike the Japanese financial authorities, the Indian authorities are not keeping quiet about the requests of the Web3 community.
