Japan’s financial regulator has released plans for a comprehensive overhaul of the tax code for fiscal year 2025, including provisions for crypto assets that could lower their tax rate.&nbsp;
In the Aug. 30 <a data-ct-non-breakable="null" href="https://www.fsa.go.jp/news/r6/sonota/20240830.html" rel="null" target="null" text="null">request</a> for tax reform, Japan’s Financial Services Agency (FSA) highlighted crypto assets, pushing for them to be treated like traditional <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/crypto-regulations-in-japan" rel="null" target="null" text="null">financial assets</a> that the public can invest in. 
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“Regarding the tax treatment of cryptocurrency transactions, cryptocurrency should be treated as a financial asset that should be an investment target for the public,” the FSA wrote.&nbsp;
<blockquote>
 “It is necessary to consider this issue from the perspective of whether&nbsp; it should be treated as such.”&nbsp;
</blockquote>
According to crypto accountants TokenTax, crypto profits in Japan are currently <a data-ct-non-breakable="null" href="https://tokentax.co/blog/crypto-taxes-in-japan" rel="null" target="null" text="null">taxed</a> as miscellaneous income between 15% and 55%. The highest rate of 55% can apply to earnings over 200,000 Japanese yen ($1,377), but it does vary depending on the individual’s income tax bracket. 
In comparison, profits earned from stock trading only incur a tax rate of 20% at the highest levels. 
Corporate crypto holders must pay a flat 30% tax rate on their holdings at the end of the financial year, even if they haven’t made a profit through a sale.
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/japan-scraps-tax-unrealized-profits-crypto" rel="null" target="null" text="null">Japan eyes scrapping corporate tax on unrealized crypto profits: Report</a>
Government ministries submit tax reform requests to the ruling party, which then passes them to a tax system research committee and the country’s national legislature for consideration. The reform is only passed into law if approved by both houses of the Japanese government: the House of Representatives and the House of Councilors.
<h2 id="strong-crypto-advocates-want-tax-reform-strong">Crypto advocates want tax reform&nbsp;</h2>
Advocates of the crypto industry in Japan have been pushing for a revision of the <a data-ct-non-breakable="null" href="https://cointelegraph.com/learn/how-to-file-crypto-taxes" rel="null" target="null" text="null">national tax regime</a> for digital assets for several years now.&nbsp;
The Japan Blockchain Association, a pro-crypto lobbying group, formally requested <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/japan-crypto-association-demands-tax-cuts-for-crypto" rel="null" target="null" text="null">the government</a> lower the tax rate on crypto assets in 2023.&nbsp;
On July. 19, the group also submitted a <a data-ct-non-breakable="null" href="https://prtimes.jp/main/html/rd/p/000000024.000081775.html" rel="null" target="null" text="null">request</a> for tax reform on crypto assets for the 2025 financial year in a bid to foster further growth in the nation’s crypto sector.
Among its proposals was a flat 20% tax rate for crypto and a three-year loss carryover deduction.&nbsp;
Despite these efforts, the requests have so far&nbsp;<a data-ct-non-breakable="null" href="https://cointelegraph.com/news/japan-web3-industry-boost-tax-reforms-startups" rel="null" target="null" text="null">failed to yield any policy changes</a>&nbsp;for the industry in Japan.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/peter-mccormack-new-podcast-what-bitcoin-did-mccormack-show/" rel="null" target="null" text="null">‘Everything feels like it’s going to shit’: Peter McCormack reveals new podcast</a>

Japan’s finance regulator calls for lower crypto taxes in 2025

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