The Government of Japan is preparing to ease tax obligations for local crypto companies as it encourages growth in the local financial and technology sectors.
Currently, Japan-based crypto issuing companies are required to pay a 30 percent corporate tax on the assets they hold, even if they have not made any sales. However, it has been noted that domestically established blockchain and crypto companies have taken action to open businesses in other countries over time.
The tax committee of Japan’s ruling party, the Liberal Democratic Party (LDP), held a meeting on December 15. A proposal, first tabled last August, has been approved, which eliminates the requirement for crypto companies to pay taxes on their paper earnings on the tokens they issue and hold.
However, a milder crypto tax rules are expected to be submitted to parliament in January and come into effect for Japan’s next fiscal year from April 1.
Speaking to Bloomberg on December 15, Akihisa Shiozaki, an LDP lawyer and Web3 policy bureau member, said this is a huge move forward. The duo underlined that many crypto companies in the country can carry out their activities more comfortably.
On the other hand, the latest action by the government reveals that despite the disaster in FTX, the country is still keen on crypto and Web3 developments.
Japanese Prime Minister Fumio Kishida made statements last October that NFTs, blockchain and Metaverse will play important roles in the country’s digital transformation. Kishida also cited the digitization of national identity cards as an example.
The Japan Virtual and Crypto Assets Exchange Association also mentioned that they may begin to relax a little more strict screening processes for listing new tokens on exchanges.