The Japanese government has given its approval to revised tax laws that provide favorable conditions for companies holding cryptocurrencies.
The main change involves the exclusion of tax on the year-end market value assessment for corporations that hold cryptocurrencies issued by third parties.
Japan reduces crypto tax bill for companies
According to a recent report, as a result of Japan's crypto tax reform, there will be a change in the scope of year-end market value assessment in the Corporate Tax Law.
Previously, profits or losses related to cryptocurrencies held by companies were based on the change between the market value and the book value at the end of the fiscal year.
However, in Japan, the tax system year It runs from April 1 to March 31.
Meanwhile, the revised standard eliminates the application of this market valuation in cases of maintaining crypto continuously.
Meanwhile, corporations will now only be subject to taxes on profits resulting from the sale of cryptocurrencies. This aligns with the tax approach applied to individual investors.
Read more: How to Reduce Your Crypto Tax Liability: A Complete Guide
This is aimed reduce the tax burden on corporations dedicated to the holding and operation of cryptocurrencies.
The tax reform reflects certain requests made in the 2024 tax reform put forward by the Japan Cryptocurrency Business Association (JCBA).
The review is expected to stimulate domestic entrepreneurship.
This comes amid a recent report from BeInCrypto that Slovakia has significantly reduced its Cryptocurrency taxes range from 19% to 25% to 7%, which could cost the government millions.
Japan's current efforts to reduce taxes
In the previous year's tax reform, only cryptocurrencies issued by the corporations themselves were exempt of the tax on the valuation of the market value.
However, there was a growing demand for similar products. treatment for those issued by other companies.
Additionally, the fiscal year 2024 tax reform scheme includes plans to reduce income tax and residence tax by 40,000 yen per person starting in June 2024.
The estimated reduction in revenue, which totals 3.8743 trillion yen for both national and local governments, marks the third largest scale since fiscal year 1989.
The bill is scheduled to be presented at the regular session of the National Diet in January next year. Requires approval from both the House of Representatives and the House of Councilors.
Read more: The 4 Best Platforms to Learn and Earn Cryptocurrencies in 2024
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