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<p>The Japan Blockchain Association (JBA) <a href="https://jba-web.jp/news/6568" rel="noopener noreferrer nofollow">has submitted a request</a> to the Japanese government to reform the current cryptocurrency tax system, as it believes the existing framework hampers the growth of the Web 3 industry and discourages public engagement with cryptocurrencies. The association believes the tax revision would help position Japan as a leading country in the Web3 industry and boost the nation’s economy through these changes.</p><h2 id="header-0">Greater tax exemption</h2><p>Last month, the Japanese National Tax Agency <a href="https://medium.com/&#64;coinness.gl/japans-new-tax-amendment-sparks-optimism-for-crypto-industry-cf3263d7d65" rel="noopener noreferrer nofollow">announced</a> that companies would no longer be taxed on unrealized gains from cryptocurrencies they hold, provided they are the issuers of those tokens. While this represents a positive step, the JBA considers it insufficient in fostering Web3 growth. In light of this, the blockchain group urges the government to extend this exemption to also cover holdings of tokens issued by third parties.</p><h2 id="header-1">Separate taxation</h2><p>Additionally, the JBA proposes a shift in the tax treatment of personal cryptocurrency transactions. It advocates for a separate taxation approach with a fixed tax rate of 20% for individual transactions, including crypto derivatives. This modification is seen as a way to adapt to the increasing prevalence of crypto asset transactions in the emerging Web3 era.</p><h2 id="header-2">Crypto-to-crypto trading tax abolition</h2><p>Under the current system, individuals trading crypto assets for other crypto assets are subject to income tax on the profits earned from each transaction. However, with the increasing variety of crypto assets and the growing prominence of crypto asset transactions in the emerging Web3 era, the JBA is advocating for the abolition of income tax on transactions between cryptocurrencies. The complexities involved in taxing such transactions within the evolving Web3 landscape have prompted the group to propose a reevaluation of the taxation approach, seeking a more favorable environment to foster the growth of the crypto industry.</p><p>Japan has demonstrated its proactive approach in promoting and embracing the Web3 industry. At the annual Japanese Web3 conference, WebX, held in Tokyo last week, Prime Minister Fumio Kishida <a href="https://medium.com/&#64;coinness.gl/japans-premier-says-the-country-is-committed-to-fostering-web3-2372e90bd555" rel="noopener noreferrer nofollow">delivered a video address</a> to mention Web3 as part of “the new form of capitalism,” acknowledging its capacity to stimulate economic growth and tackle societal challenges. Minister Kishida highlighted the Japanese government’s dedication to creating a supportive and conducive environment for the advancement of Web3 projects.</p>

Japan’s Blockchain Group Requests Crypto Tax Revision for Web3 Adoption

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