Ah, Japan, the land of sushi, cherry blossoms, and now, crypto-friendly tax regulations! The National Tax Agency (NTA) in Japan has decided to bring some much-needed clarity to the treatment of cryptocurrencies. In a delightful twist, companies will no longer be subjected to the dreaded 30% corporate tax on unrealized gains from crypto assets. Hallelujah! The NTA released a notice last week, announcing this welcome change.


The NTA Gives Crypto Assets a “Get Out of Tax Free” Card

According to the NTA’s explanation, crypto assets will be excluded from a company’s asset valuation based on market value, but only if they meet certain conditions. But wait! To benefit from this tax exemption, companies must hold onto their coins continuously after issuance. Oh, and there’s more! The crypto asset itself must also face transfer restrictions. So, it’s a bit like a game of “Don’t Sell Your Crypto and Don’t Even Think About Transferring It” to get that sweet tax break.

Read More: Hong Kong Regulator Pushes Lenders to Embrace Crypto Exchanges Amid Global Crackdown

Sayonara, 30% Corporate Tax Rate!

Once upon a time, Japanese companies were forced to pay a flat 30% corporate tax rate on their crypto holdings, regardless of whether they had actually made a profit from selling them. Talk about a bummer! This rule had the crypto companies in knots and hindered the growth of blockchain innovation. It’s no wonder that some of them packed their bags, seeking greener pastures abroad.

From Singapore with Love, Stake Technologies Welcomes Tax Relief

Remember that Web3 infrastructure developer called Stake Technologies? They waved goodbye to Japan and set up shop in Singapore back in 2020. The CEO, Sota Watanabe, even told Bloomberg that if Japan’s government decided to change the corporate tax laws, he’d gladly bring the company back home. Well, it seems that his wish has been granted! Watanabe, also known as the mastermind behind the Polkadot-based Astar Network, couldn’t contain his joy. He welcomed the tax changes, believing they would keep Japan’s crypto companies from flocking overseas. However, he insists that the tax relief should extend to holdings of tokens issued by other companies too. After all, we need all projects to flourish!

Japan: Where Crypto Dreams Come True, Unlike the US

While the crypto industry faces mounting regulatory pressure in the United States, our friends in Japan are seizing the opportunity to attract talent and investment. The US Securities and Exchange Commission (SEC) has been on a lawsuit spree, accusing Binance and Coinbase of offering unregistered securities. But who needs the US when you have Japan, right? The SEC chair, Gary Gensler, went on a rant, claiming that the entire crypto industry is built on non-compliance. He boldly proclaimed, “We don’t need more digital currency.” Well, Mr. Gensler, Japan begs to differ!


What About Stablecoins?

Japan is no stranger to innovation, as they’ve implemented a legal framework addressing stablecoins. The revised Payment Services Act, which recently came into effect, allows registered stablecoins to be used as a means of payment. This forward-thinking regulatory update provides a clear legal framework for stablecoin transactions. Noritaka Okabe, CEO of the Tokyo-based stablecoin issuer JPYC, proudly declared that Japan is ahead of the pack when it comes to stablecoin regulations. Take that, rest of the world!

In conclusion, Japan is proving to be a crypto dream, with its tax relief, open arms for talent and investment, and a legal framework for stablecoins. While the US battles with regulators who seem to have a personal vendetta against crypto, Japan is stepping up and saying, “Come on in, the crypto’s fine!” So, whether you’re a crypto enthusiast or just someone looking for a tax break, Japan might just be the place to be. Konnichiwa, crypto opportunity!

Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice.Please note that despite the nature of much of the material created and hosted on this website, HODL FM is not a financial reference resource and the opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice of this sort, HODL FM strongly recommends contacting a qualified industry professional.