In an explanatory note, the FSA says that the agency’s new initiative aims to reduce the tax burden and improve the regulatory environment needed to successfully promote blockchain and Web3 cryptocurrency startups.
Under the current Japanese tax code, crypto companies are required to pay tax on unrealized profits, calculated from the book value of digital assets, at the end of each financial year. At the same time, in many countries, crypto companies pay such fees only in the event of the sale or exchange of digital assets for fiat.
The taxation rules in force in Japan have been repeatedly criticized by representatives of the crypto community. In particular, the founder of the blockchain companies Astar Network and Startale Labs, Sota Watanabe, said that the lack of tax reforms impedes the development of blockchain innovations and is fraught with an increase in the outflow of technologically significant startups from the country. Ultimately, this will lead to the decline of the Japanese crypto market as early as 2024. thinks Watanabe.
Earlier, the Japan Blockchain Association (JBA) asked the FSA to consider extending the 2024 tax reforms to participants in the crypto sector.
Source: Bits
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