Tax Exemption for Token Issuers in Japan
Token issuers in Japan will no longer be liable for corporate taxes on unrealized cryptocurrency profits, as per a law alteration by the National Tax Agency on June 20th.
Nearly six months after the Japanese government gave the nod to a plan that would do away with the need for crypto businesses to pay taxes on paper profits made from tokens they issued and retained, the tax exemption goes into effect.
Since August of last year, Japanese legislators have been debating new regulations concerning taxation of cryptocurrencies as part of a larger tax overhaul for 2023. This week, the tax agency finally gave its consent to the proposal. Under the new laws, businesses in Japan that issue tokens are exempt from paying the standard 30% corporate tax on their assets. Before this legislation, even unrealized gains were subject to taxation.
The Liberal Democratic Party (LDP), which is in power, anticipates facilitating the process for businesses to engage in activities related to token issuance.
Regulations Concerning Cryptocurrency Transactions in Japan
The Japanese cryptocurrency industry has recently undergone significant alterations. On June 1st, Japan began to implement more stringent Anti-Money Laundering (AML) regulations to ensure that its legal framework for cryptocurrency transactions is in line with international standards. This came after the Financial Action Task Force (FATF) determined that the existing AML legislation was inadequate and it was subsequently revised in December.
In June of 2019, a law was enacted by the government that disallowed non-banking entities from issuing stablecoins. This legislation was just put into effect a few weeks ago, and it states that only banks licensed by the government, registered money transfer agents, and trust companies are allowed to issue stablecoins in the country.
Japan was one of the first nations to recognize cryptocurrency as a private possession, and its laws concerning crypto are some of the most rigorous on the planet. After Mt.Gox and Coincheck were breached, Japan’s financial regulator strengthened rules on digital currency exchanges. It is thought that the nation’s regulations enabled FTX users in Japan to receive their funds back swiftly after the exchange’s global failure, unlike users in other nations without a definite timeline for their reimbursements.
Magazine: Crypto City Guide to Osaka, Japan’s second largest city.
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