[NEWS] JCBA and JVCEA jointly submit a request for cryptocurrency tax reform to the government

On the 31st of last month, JCBA (Japan Cryptocurrency Business Association) and JVCEA (Japan Cryptocurrency Exchange Association) announced that they had jointly compiled a 2024 tax reform request for crypto assets (virtual currencies) and submitted it to the Financial Services Agency and other government ministries and agencies on July 31st.

In this request, requests were made regarding "separate taxation," "corporate tax," "asset tax," and "exchange of crypto assets."

Specifically, in the separate taxation section, it mentions 20% separate taxation on declaration and loss carryover deduction.

In addition, in the corporate tax section, it is included that crypto assets held continuously by corporations other than for short-term trading should be exempt from end-of-period market value tax, and in addition to making income from the transfer of inherited crypto assets eligible for the acquisition cost surcharge as a special exemption, it is also included that the minimum average market value of the past three months should be selected for the valuation of inherited assets.

In addition, it is requested that tax be imposed not when crypto assets are exchanged between crypto assets, but rather when they are exchanged for legal tender.

▶ Outline of the request: Quoted from JCBA

In a press release, JCBA pointed out that due to the worldwide attention on Web 3.0, the market capitalization and transaction amount of crypto assets have increased significantly worldwide, and that their use as a useful payment method and asset class, like other financial products, is being established both domestically and internationally.

They also stated that crypto assets are becoming the mainstream payment method in virtual spaces, such as NFTs, metaverse transactions, and transactions between members of DAOs.

In Japan, the National Tax Agency announced a partial revision of the corporate tax in June this year. As a result, self-issued crypto assets that meet the conditions can be excluded from the subject of end-of-period market value taxation.

However, there are still issues that are lagging behind, such as the legal treatment of crypto assets issued by other companies that are held by corporations. In addition, discussions are still ongoing regarding the tax system for crypto assets targeting individuals.

JCBA argues that these tax issues are barriers for entrepreneurs and users, causing delays in utilization and the outflow of human resources overseas.

The Japan Blockchain Association (JBA) also submitted a request for tax reform on the 27th of last month.

The JBA requested the "elimination of the year-end unrealized gain tax on corporations that hold cryptocurrencies issued by third parties," "the introduction of separate taxation on declarations and carry-forward deduction of losses," and "the elimination of taxation when exchanging cryptocurrencies with other cryptocurrencies," which is roughly the same as the requests submitted by the JCBA and JVCEA.

Reference:JCBA announcement, JBA announcement
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