Japan Proposed Tax Break For Crypto Investors
The country's financial regulator proposed a temporary easing of corporate tax rules for cryptocurrency assets as well as ruling for retail investors as part of a program to reinvigorate the economy, initiated by Prime Minister Fumio Kishida.
Companies that invested in the cryptocurrency market will avoid paying taxes for paper gains. The proposal has been made via an annual tax-code change request. Individual investors will also benefit from the new rulings thanks to the announced tax breaks.
Japan's prime minister initiated a "New Capitalism" vision designed to boost the world's third largest economy, which has faced trouble for the last few decades as its currency’s value reached an extreme low against the U.S. dollar. Kishida pledged to increase the wealth of households in the country and support the growth of the digital business.
Previously, pro-crypto groups and companies were asking for changes in the tax rulings in the country, as high corporate taxes affected the growth of Web3 and crypto companies negatively, causing them to relocate to countries like Singapore. The corporate tax from unrealized gains and profit from cryptocurrency investing is sitting at 30%.
As for now, FAS wants to expand the break initiative by raising current investment limits and making the program permanent. Under the program, retail investors are allowed to have some of their investment gains without paying taxes over a certain period of time.
The initiative was designed to incentivize citizens to put their savings into the country's economy or any other investment tools that would help the Japanese economy to return to its previous growth rate.
According to Bank of Japan data, the majority of citizens have their financial assets in cash and deposits, which is worth roughly $14.5 trillion, or 2 quadrillion yen.Source