TOKYO — The Japanese government and ruling coalition are moving to impose a flat 20% tax on gains from cryptocurrency trading, regardless of the amount, Nikkei learned on Monday.
The revision would bring tax rules for cryptocurrencies in line with those for equities, investment trusts and other financial products. Policymakers hope that reducing the tax burden will help foster trading in the domestic market.
Under the new rules, crypto income would be subject to a separate taxation scheme, under which certain types of income is taxed differently from other earnings. The scheme would allocate 15% of the revenue to the national government and 5% to regional authorities. The change is slated for inclusion in the 2026 tax reform outline to be compiled at the end of the year.
At present, income from cryptocurrency transactions is included with wages and business income and taxed progressively, with rates climbing as high as 55%. Many investors are thought to hold off on selling crypto assets because of the heavy taxes on gains.
Equities and investment trusts are already taxed separately at a uniform 20% rate. If the rate for cryptocurrencies is aligned with that of other financial instruments, trading could pick up and ultimately boost tax revenue. Some policymakers also hope the shift will spur development of related industries such as blockchain, a distributed ledger technology that underpins digital assets.
A key factor behind the move is that cryptocurrencies are now firmly established as investment products. Data from the Japan Virtual and Crypto Assets Exchange Association (JVCEA) show that there are roughly 8 million active accounts in Japan, with spot trading volume in September reaching about 1.5 trillion yen ($9.6 billion).
