The Financial Services Agency (FSA) of the Japanese government and the Ministry of Economy, Trade and Industry (METI) will review corporate taxation for crypto companies from 2023.
The Japanese government has announced that it will begin reviewing crypto tax rules for corporations from 2023. Local media outlets reported that the Financial Services Agency (FSA) and the Ministry of Economy, Trade and Industry (METI) would review how tax business Those who use crypto “for the purpose of nurturing startups”.
The review is focusing on crypto startups that are issuing tokens to raise funds that are used to build businesses. Regulators say the new system will consider whether companies holding crypto assets will be taxed only if there is profit from the sale. He also says that the agencies do not want to hinder the growth of startups and discourage them from working inside Japan.
The report quoted Hiroshi Mikitani, chairman and chairman of the Rakuten Group, as saying that crypto businesses move to places like Japan “because it’s stupid to start a business in Japan.” Many crypto companies operate out of countries such as Singapore and the United Arab Emirates due to more favorable regulation.
House of Representatives member and Liberal Democratic Party member Taira Masaki also acknowledged the development on Twitter. Masaki calls himself the “Chairman of the Web3 Project Team”.
Crypto advocates in Japan have called for a tax cut in July 2022 to stop the talent exodus that Mikitani was referring to. Currently, Japan imposes a 30% corporate tax on cryptocurrencies, which they believe will cause brain drain in the country. Those calling for these changes also said that Japan is not an easy place to do business.
Crypto groups in Japan have also issued a fiscal 2023 tax reform request, which calls for a tax rate of 20%. The issues they identify are a lack of uniformity within the system, the need to establish a Web3 presence, and the convenience of tax filing.
Japan’s METI has also established a Web3 policy proposal to better organize and direct this new effort. Sumitomo Mitsui Banking Corporation, one of the largest banks in the country has also announced its foray into NFT and Web3. Japanese trust banks have also received approval to manage crypto assets later this year.