[NEWS] The Liberal Democratic Party and Komeito announce the "2024 Tax Reform Outline" and will also partially revise the cryptocurrency tax system for corporations

On the 14th, the Liberal Democratic Party and Komeito announced the outline of the tax reform for fiscal 2024. As a basic idea, they have made it clear that they will focus on "raising wages" by focusing on overcoming deflation and responding to rising prices.

In particular, they have positioned "the realization of wage increases that exceed inflation" as the top priority, and have stated that disposable income will be increased by implementing a fixed tax cut on income tax and individual inhabitant tax.

In addition, the outline of the tax reform for fiscal 2024 includes various measures aimed at promoting domestic investment, and a partial review of crypto assets (virtual currencies) will be carried out in order to fundamentally strengthen the startup ecosystem.

The content included this time is that crypto assets held by companies as third parties other than the issuer will be exempt from end-of-period mark-to-market taxation if certain requirements are met. Specifically, crypto assets issued by other companies that are held continuously for purposes other than short-term trading, and crypto assets that are technically restricted from being transferred to third parties based on that premise, will be subject to this.

Last year's tax reform outline only covered self-issued crypto assets, but by relaxing the conditions, it is also intended to prevent promising startups from moving overseas.

It is explained that this will help improve the environment for promoting Web 3.0 and promote blockchain-based business ventures.

The tax reform outline announced this time does not mention any review of the crypto asset tax system for individuals.

Until now, domestic crypto asset-related industry groups have called for the introduction of separate taxation and loss carryover deduction, as well as the abolition of tax on crypto asset exchanges, but it appears that further discussion is still needed.

It also mentions the establishment of a system to combat tax evasion for crypto assets.

In addition, a report on tax evasion measures for crypto asset exchanges was included.

Last month, the OECD (Organization for Economic Cooperation and Development) announced that 48 countries had agreed to an international crypto asset reporting framework, including Japan.

In the future, efforts will be made to realize automatic information exchange between signatory countries such as the United States, South Korea, and Canada by 2027, and a system will be established in Japan that will require reporting to tax authorities.

Reference:Tax reform outline
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