The idea will be included in yearly tax policy guidelines for the country’s parliament.
Token issuers are liable to a tax rate of about 35% on unrealized profits for tokens.
On Friday, a member of Japan’s governing Liberal Democratic Party (LDP) announced that the LDP’s tax committee has endorsed a plan to exclude crypto businesses that issue their own tokens from paying corporation taxes on unrealized profits.
The idea will be included in yearly tax policy guidelines presented to the country’s parliament in January. This is according to Akihisa Shiozaki, secretary-general of the party’s Web3 project team. And will take effect in the following tax year beginning on April 1.
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Token issuers are liable to a tax rate of about 35% on unrealized profits. For tokens that they possess under existing corporation tax regulations if the tokens are issued on an active market. At the conclusion of the taxation period, a holding is subject to taxes at its fair market value. The creators of many Japanese projects were discouraged by this tax and encouraged to establish their businesses in other countries.
Industry groups also proposed tax changes including taxing cryptocurrency profits at the same rate as equities. And only taxing people when they convert cryptocurrency gains to fiat cash. These are very unlikely to pass in the current legislative session, but they will likely be discussed again in the LDP’s tax debates next winter.
This initial policy proposal to eliminate the tax on paper profits was released by the Web3 project team on Thursday. Guidelines for auditing crypto companies and a proposal for a law regulating DAOs of the LLC variety were also included, as were suggestions for supporting the issuance of yen-based permissionless stablecoins and modifying the structure of the Japan Virtual Currency Exchange Association, which is responsible for token screening.
- @ December 18, 2022 8:01 pm