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Japanese regulator plans to eliminate “unrealized profits” tax on crypto

Japan’s top financial regulator, the Financial Services Agency (FSA), has decided to address cryptocurrency regulation by proposing to change the tax regime regarding digital assets.
As reported by local mediaThe FSA reportedly submitted the request on 31 August. The main recommendation in the 16-page document is: Exempt domestic businesses from year-end “unrealized profits” tax on cryptocurrencies. According to some local regulations, legal entities only have to pay taxes after crypto assets are converted into fiat currency, but in Japan they are regularly taxed on an annual basis.
The amendment proposed by the FSA is acceptable as the Department of Economy, Trade and Industry has already stated that it supports it.
As the FSA explained in its statement, the reform “It will improve the environment for promoting Web3 and encourage business ventures using blockchain technology”.
Supporters of the crypto industry in Japan have long called for an overhaul of the country’s digital asset tax regime. In late July, the Japan Blockchain Association (JBA), a nonprofit organization, He urged the Japanese government to take action three big changes cryptocurrency legislation.
The first is to eliminate the end-of-year unrealized profit tax of companies that own cryptocurrencies. The other two are moving from taxing profits from personal cryptocurrency trading to separate taxation at a single rate of 20%, and Removal of income tax on profits made each time someone trades cryptocurrencies.

Translation of Walter Rizzo

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