Japan considers implementing a fresh cryptocurrency tax system for corporate digital asset ownership.

Japan is preparing to implement a fresh tax system for companies that hold cryptocurrencies on their balance sheets for an extended period. The Liberal Democratic Party and its coalition partner, Komeito, are considering a new proposal that would exempt businesses from paying taxes on unrealized gains from crypto. However, this exemption would only be applicable to companies that are long-term holders.
Currently, Japanese companies are required to pay corporate taxes on their crypto holdings based on valuations at the end of each fiscal year. The proposed changes, expected to be part of the fiscal 2024 tax reform plan, aim to increase liquidity in the market. Other Asian regions have also intensified their efforts to become prominent “crypto hubs.”
According to the report from Nikkei Asia, policymakers in the ruling coalition have also confirmed a proposal to modify how foreign visitors are taxed on their crypto purchases in Japan. However, the specifics of this proposal are yet to be determined for 2024.
In addition to these developments, Japan is preparing to launch its first yen-pegged digital currency for settlements related to clean energy. This digital currency, backed by bank deposits, will be issued by GMO Aozora Net Bank under the ticker DCJPY by July 2024. The turnover of DCJPY will occur on a blockchain network developed by DeCurret, a Japan-licensed cryptocurrency exchange acquired by Amber Group in early 2021.
Initially, Internet Initiative Japan, a telecommunications firm, plans to use the digital currency for settling clean energy certificates. However, DeCurret has reportedly held discussions with other major Japanese companies, including Mitsubishi UFJ Financial Group Inc, to explore the potential applications of this technology.
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