KEYTAKEAWAYS
- Japan's ruling coalition has included cryptocurrency tax reform in its 2025 outline, marking first major step toward separate taxation framework.
- Current cryptocurrency taxation of up to 55% may be reduced to 20%, aligning with other financial products' tax treatment.
- Reform aims to prevent talent exodus and enhance Japan's Web3 competitiveness through improved tax policies and regulatory frameworks.
CONTENT
Japan’s 2025 tax reform outline includes cryptocurrency tax system review, signaling potential shift to 20% separate taxation from current 55% rate. LDP’s milestone decision paves way for modernized crypto regulations and investment framework.
**Originally reported by CoinPost
TAX REFORM OUTLINE AND CRYPTOCURRENCY
The Liberal Democratic Party (LDP) and Komeito’s tax policy research councils have finalized the tax reform outline for fiscal year 2025 (Reiwa 7).
（8:30-9:15）自民党税調・税制調査会総会
令和7年度税制改正大綱が決着しました。
103万円の壁の引き上げ、ガソリンの暫定税率の廃止、 iDeCoの拠出限度額の引き上げなども明記されました（金額の記載はなし）。
また、暗号資産税制に関する今後の検討も記載されました。 pic.twitter.com/XyvwfOraJL— 神田潤一（衆議院議員2期目、法務大臣政務官） (@Jun1CanDo) December 20, 2024
The tax reform outline is essentially a blueprint for the following year’s tax reforms that the ruling coalition compiles at the end of each year. Contents included at this stage typically proceed to be deliberated and enacted as specific legislation in the following year’s ordinary Diet session.
Therefore, for the controversial cryptocurrency tax reform issue, inclusion in the tax reform outline represented a crucial milestone.
Currently, cryptocurrencies are classified as “miscellaneous income” and subject to taxation rates of up to 55% – higher than other countries. Additional challenges include taxation on currency-to-currency exchanges and the inability to offset gains and losses across different tax years. These issues have raised concerns about the exodus of promising talent and startups overseas, business stagnation domestically, and declining international competitiveness in the emerging Web3 sector.
- Related: “Making Cryptocurrency an Asset Contributing to the National Economy” – LDP’s Emergency Proposal Puts Focus on Year-End Tax Reform Outline (CoinPost)
- Related: National Tax Agency Indicates Capital Gains from U.S. Bitcoin ETFs by Japanese Residents Subject to “Separate Taxation” (CoinPost)
EXCERPT FROM LDP’S TAX REFORM OUTLINE
‘Regarding cryptocurrency transaction taxation, certain cryptocurrencies will be positioned as financial products contributing to national asset formation within regulatory frameworks. This will be reviewed alongside necessary legal preparations, including investor protection measures such as explanation obligations and suitability regulations equivalent to other financial products with tax exemptions like listed stocks, premised on transaction reporting obligations to tax authorities by trading businesses.’
自民党税制改正大綱
「暗号資産取引に係る課税については、一定の暗号資産を広く国民の資産形成に
資する金融商品として業法の中で位置づけ、上場株式等をはじめとした課税の特
例が設けられている他の金融商品と同等の投資家保護のための説明義務や適合性…— 酒井克彦 (@SakaiTax) December 20, 2024
REPRESENTATIVE HIRAI’S EMERGENCY PROPOSAL TO FSA
金融庁へ。加藤勝信金融担当大臣に「暗号資産を国民経済に資する資産とするための緊急提言」を申入れました。ポイントは①暗号資産取引による損益を申告分離課税の対象に、②暗号資産に関する規制の枠組み等について、③国民経済に資する資産となるためのサイバーセキュリティへの取組に、の3点。加藤… pic.twitter.com/gZ69ytUfCj
— 平井卓也（ひらいたくや） (@hiratakuchan) December 20, 2024
In relation to this matter, Representative Takuya Hirai, head of the LDP’s Digital Division and Japan’s first Digital Minister, visited the Financial Services Agency (FSA) to present an ‘Emergency Proposal for Making Cryptocurrency an Asset Contributing to the National Economy’ to Financial Services Minister Katsunobu Kato. The proposal highlighted the following three key points:
- Making cryptocurrency trading gains and losses subject to separate taxation
- Establishing regulatory frameworks for cryptocurrencies
- Implementing cybersecurity measures to ensure assets contribute to the national economy
According to Representative Hirai, Minister Kato largely agreed with the proposals, suggesting acceleration toward specific system design.
The inclusion of cryptocurrency taxation review in the LDP’s tax reform outline now establishes a pathway for specific institutional reforms, including tax rate revisions, loss offsetting rules, and taxation category changes.
This enables the FSA and National Tax Agency to begin specific system design, allowing cryptocurrency exchanges and other businesses to proceed with necessary preparations.
Had the outline not included cryptocurrency tax system review, implementing tax reforms for fiscal year 2025 would have been extremely difficult, likely resulting in significant delays.
While currently at the “review stage” with remaining uncertainties, this represents a significant step forward, especially considering that tax reform requests have been consistently rejected in recent years.
This development suggests potential future improvements for investors, such as introducing 20% separate taxation and loss carryforward systems, as inclusion in the outline makes it easier to incorporate cryptocurrency tax improvement measures as part of the 2025 policy package.
- Related: Discussing Cryptocurrency Tax Reform: Representatives Hirai and Ochi Share “Japan’s Web3 Strategy and Vision” | WebX2024 (CoinPost)
The outline also addresses the “¥1.03 million wall” issue, confirming plans to raise the deduction limit to ¥1.23 million. Democratic Party for the People leader Yuichiro Tamaki argues this increase is insufficient, calling for further raises. The LDP outline includes language from the recent three-party agreement to “aim for ¥1.78 million and proceed with sincere discussions from next year.”
- Related: Can You Buy Bitcoin ETFs in Japan? Comparing Benefits with Spot BTC and Guide to Buying Related Stocks (CoinPost)
- Related: Cryptocurrency Exchange Rankings | Comprehensive Comparison Based on Professional Analysis of Track Record and Reputation (CoinPost)
