Japan’s crypto tax cut will take the form of 20%
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Suja Sunderarajan
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Japan recently unveiled a 2026 tax reform plan, implementing a significant crypto tax cut to 20 percent. Crypto asset acquisitions in the country are currently subject to a 55% tax, which discourages local business.
The proposed tax reform, backed by the government, would put crypto profits at a flat 20% tax rate. It equates the asset class with stocks and investment trusts.
Crypto Tax Shift to attract more investors
According to a Nikkei report on Monday, the tax change will place cryptos in a different framework. The announcement to reduce the tax burden has received widespread attention among Japanese investors.
“Now, under the revised Financial Instruments and Exchange Act, various measures are being implemented to protect investors with cryptocurrencies, making it easier for more people to accept cryptocurrencies,” said Kimhiro Mine, CEO of Finoject, which is familiar with crypto tax trends.
Law is limited to ‘certain' crypto assets – here's why.
However, the tax reform is limited to “certain crypto assets” managed by businesses registered in the Financial Instrument Business Operator Registry, Monday's report read.
Although major cryptocurrencies such as Bitcoin and Ethereum may qualify for the mentioned crypto under the regulation, it is still unclear what the trading requirements are.
Additionally, there will be a three-year carry-forward system for losses incurred on buying and selling virtual currencies. This means that the loss can be carried forward and reduced for three years from 2026.
If the law is revised, investment trusts involving cryptos will be allowed in Japan. The country also launched its first XRP exchange-traded fund (ETF), with additional goals to launch two ETFs in Japan that offer exposure to certain crypto assets.
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