The Japanese government’s Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) will review corporate taxation for crypto companies starting in 2023.
The Japanese government has announced that it will start reviewing crypto tax rules for businesses from 2023. Local media reported that the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) would examine how tax companies who use crypto “for the purpose of nurturing startups”.
The review focuses on crypto startups that issue tokens to raise funds which are then used to grow the business. Regulators say the new system would consider whether companies that own crypto assets would only be taxed when profits are generated from sales. They also say the agencies don’t want to hamper the growth of startups and discourage them from working inside Japan.
The report quotes Rakuten Group chairman and chairman Hiroshi Mikitani as noting that crypto companies are moving to places like Japan “because it’s stupid to start a business in Japan.” Many crypto companies operate from countries like Singapore and the United Arab Emirates due to more accommodating regulations.
House of Representatives and Liberal Democrat Member Taira Masaaki also acknowledged the development on Twitter. Masaaki refers to himself as “Chairman of the Web3 Project Team”.
Crypto advocates in Japan have called for tax cuts in July 2022 to stem the brain drain of talent that Mikitani was referring to. Currently, Japan has imposed a 30% corporate tax on cryptocurrencies, and they believe this will lead to a brain drain in the country. Those calling for the changes also said Japan was not an easy place to do business.
Crypto groups in Japan have also released a tax reform demand for fiscal year 2023, which calls for a 20% tax rate. The problems they identify are the lack of consistency within the system, the need to establish a presence on the Web3 and the facilitation of tax declarations.
The Japanese METI has also set up a web3 policy offer to better organize and guide this new effort. One of the country’s largest banks, Sumitomo Mitsui Banking Corporation, also announced a foray into NFTs and web3. Japanese trusted banks also received permission to manage crypto assets later this year.
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