Japanese Financial Watchdog Wants Reduction in Crypto Tax Rate

Japanese Financial Watchdog Wants Reduction in Crypto Tax Rate

tax rate for crypto

According to a recent report, the Japanese Financial Services Agency (FSA) has been asked by the Japan Association of New Economy (JANE) to reduce its current tax rate for crypto trading income.

JANE Wants Tax Deduction

The report made it known that JANE which currently has Hiroshi Mikitani, the CEO of Japanese e-commerce giant Rakuten as its head have forwarded a proposal request to the financial regulator of Japan asking them to stop placing a tax on crypto using general taxation but to start using progressive taxation.

Currently, a tax rate of 55% is being placed on income generated from trading cryptocurrencies. But if progressive taxation is imposed, the tax rate will be reduced to 20% which is the same rate that is being applied to stocks and forex markets in the country.

Also, the association asked the FSA not to impose any tax on crypto-to-crypto transactions.

JANE: Huge Tax Rate Harms Innovation

According to the proposal, JANE requested that the regulatory body not harm innovation by imposing regulations that are restrictive on the crypto industry. The proposal specifically referred to the clarification of the FSA’s regulatory scope, the process of initial coin offering (ICO) settlement, derivative trading, and crypto custody business.

Meanwhile, Rakuten, which is also referred to as “Japan’s Amazon,” has announced that it will be carrying out a revision of its corporate structure, setting up a new payments subsidiary which includes its crypto-related business.

There are plans to change the outlook of its loyalty branch, Spotlight Inc., to a new entity called Rakuten Payment, which will also operate a cryptocurrency exchange.

Crypto Licensing

Importantly, the FSA has made it known that the agency’s review process of crypto-related businesses licences will either be approved or thrown out within a timeline of 6 months which started on the 12th of January.