According to a recent announcement from Japan’s National Tax Agency, crypto issuers are exempted from paying capital gains taxes on unrealized gains.
Although, in the previous year the tax committee of the nation’s ruling Liberal Democratic Party (LDP) accepted a plan to exempt cryptocurrency firms that issue their own tokens from paying corporation taxes on unrealized gains.
Since at least last year, Japan has been reexamining how it treats cryptocurrency taxes to encourage businesses to stay in the nation after it appeared that high taxes were the cause of a firm exodus.
The partial amendment mentioned in the document dated June 20 replaces an earlier rule that subjected token issuers to a capital gains tax of approximately 35% on their own tokens, as well as on unrealized gains.
The memo stated that the tax exemption would also apply to unrealized gains from keeping the relevant cryptocurrency continuously after its issuance or from using specified technical tools to stop transfers to other parties.
Other tax adjustments have been requested by Japan’s industry associations, such as taxing cryptocurrency profits at the same rate as stocks and only taxing individuals when cryptocurrency gains are converted to fiat money.