Japan announces cryptocurrency tax reform plan, proposes introduction of separate taxation system

According to TechFlow, on December 26, CoinPost reported that Japan's Liberal Democratic Party and Japan Innovation Party announced the draft outline for the tax reform for the 8th year of Reiwa on December 19. The proposal positions cryptocurrencies as financial products that help form national assets and plans to introduce a separate taxation system. According to the plan, spot trading, derivatives trading, and ETFs of cryptocurrencies will be included under the scope of separate taxation, and trading losses will be allowed to be carried forward and deducted for three years, making the tax system more consistent with that of stocks and other financial products.

It is worth noting that this reform plan does not cover all cryptocurrency transactions. Yield-generating transactions such as Staking and Lending may still be subject to the current tax system. At the same time, NFTs are not explicitly included in the scope of the reform and may continue to be taxed as miscellaneous income under comprehensive taxation.

Exchanges will submit user trading reports to tax authorities, and higher tax compliance requirements will be imposed on investors in the future. Experts recommend that investors organize their trading records in advance to smoothly adapt when the new tax system is implemented.