Japan is preparing to introduce a significant change to how it taxes cryptocurrency gains, with plans to implement a flat 20% levy—bringing digital assets in line with equities and investment trusts, according to Nikkei. The reform, supported by the government and ruling coalition, represents the most substantial update to the country’s crypto tax policy in years and underscores regulators’ growing acceptance of crypto as a mainstream investment vehicle.
Under the proposal, crypto gains would fall under Japan’s separate-taxation system, which treats certain types of income independently from salaries or business profits. The 20% rate would be divided between national authorities, receiving 15%, and regional governments, receiving 5%. The changes are expected to be finalized within the 2026 tax reform package at the end of December.
For individual traders, the shift would dramatically ease tax pressures. Currently, crypto profits are subject to progressive tax brackets that can reach up to 55%—a structure long criticized for limiting participation in Japan’s crypto market.
The policy update comes as domestic trading activity continues to expand. Data from the Japan Virtual and Crypto Assets Exchange Association shows spot volumes on local exchanges exceeding $9.6 billion in September, reflecting sustained growth in Japan’s regulated digital asset ecosystem.
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