Japan to finalize crypto tax reform by June 2025
Currently the tax on cryptocurrencies is 55%
According to Japanese media, Finance Minister Katsunobu Kato has promised to complete the approval process for Japan's cryptocurrency tax reform by the end of June 2025.
Minister Kato stated that financial regulators are actively discussing tax law reforms related to cryptocurrencies for 2025 and are considering various legal measures.
“The Financial Services Agency will review the framework for crypto assets by June this year,” Japan’s Finance Minister said.
Under the current tax system, cryptocurrencies in Japan are classified as "miscellaneous income," which can result in taxation of up to 55%, depending on an individual's earnings.
However, in October 2024, Japan’s Democratic Party leader Yuichiro Tamaki proposed reducing this tax to 20%.
In December 2024, ahead of the announcement of the 2025 tax reform guidelines, the Policy Research Council of Japan’s ruling Liberal Democratic Party (LDP) approved an "urgent proposal" to recognize cryptocurrency as an asset that contributes to the national economy.
This proposal included a legislative initiative to introduce separate taxation on declared profits and losses from cryptocurrency transactions.
Additionally, the LDP’s Policy Research Council is considering changing the legal definition of crypto assets, which are currently recognized in Japan as a payment method rather than an investment asset.
Government and opposition compete to promote digital assets
It is worth noting that Finance Minister Kato’s statement on crypto taxation came in response to a question from Akihisa Shiozaki, head of the LDP’s Digital Society Promotion Unit.
Shiozaki questioned the Japanese government's stance on cryptocurrency, arguing that Japan’s tax discussion on crypto assets is "significantly stricter" than in other countries with more market-friendly regulations.
However, Japanese authorities see great potential in digital assets. Earlier, Prime Minister Shigeru Ishiba stated that he hopes cryptocurrency will become a key factor in solving Japan’s social and financial challenges while boosting national productivity.
The Prime Minister also emphasized the need to protect crypto users and improve the Web3 ecosystem.
As we wrote, japan’s government has officially dismissed the idea of adding Bitcoin (BTC) to its national reserves, emphasizing concerns over the cryptocurrency’s volatility and lack of classification as a traditional foreign exchange asset.
