Japan Set to Streamline Cryptocurrency Taxation, Lowering Costs for Traders

A major tax reform proposal by the Japanese government could significantly impact cryptocurrency trading. This initiative aims to bring digital asset taxation closer to traditional investments by applying a flat 20% rate to profits from crypto trades. Current frameworks treat such earnings as ‘miscellaneous income,’ leading to potentially high progressive rates of up to 55%. Industry groups have also advocated for a three-year carry-forward on trading losses, similar to stock markets. This change could simplify reporting procedures for individual traders and encourage corporate participation in Japan’s burgeoning digital asset sector.