With the new proposal, Japan is preparing to eliminate the tax that Japanese companies must pay on unrealized profits from cryptocurrencies.
According to local news agency Nikkei, even if the cryptocurrencies currently held by companies are not sold, they are considered as profit or loss according to the difference between the market value at the end of the fiscal year and the value at which they were purchased.
Instead, the new tax regulation aims to make companies pay taxes only based on the income and profits they make from the cryptocurrencies they sell.
Gaku Saito, head of the tax review committee of the Japan Crypto Asset Cooperation Association, said in an interview, “Web3 companies moved abroad because they were held liable for taxes even if they did not sell the cryptocurrencies they held. In other words, the companies had to pay taxes on unrealized gains, which forced them to sell their assets and the business hinders development.” he said.
Following these statements, Japan is preparing to tax companies only on the profits they make from the sale of cryptocurrencies with the proposed proposal.
This decision is expected to come into force on April 1, 2024.
