Japanese crypto issuers exempted from paying taxes on unrealized gains, says government.

On June 20, Japan’s National Tax Agency announced that crypto issuers in the country will not be required to pay capital gains taxes on unrealized gains. The ruling Liberal Democratic Party (LDP) tax committee approved a proposal last December to exempt crypto startups from paying corporate taxes on unrealized gains. Japan has been reviewing its tax treatment of crypto since at least last year to encourage startups to remain in the country. The June 20 document notes a partial revision from a previous requirement that subjected token issuers to a capital gains tax of around 35% on their own tokens, as well as on unrealized gains. The tax exemption will also apply to unrealized gains from holding applicable cryptocurrency continuously from the date of issuance or from taking certain technical measures to prevent its transfer to other persons. Japan’s industry associations have also sought other tax reforms, including taxing crypto gains at the same rate as stocks and only taxing individuals when crypto gains are converted to fiat currency. For more information, read “Japan Embraces Web3 As Global Regulators Grow Wary of Crypto.” Edited by Sandali Handagama.