- Japan has scrapped corporate tax on unrealized profits
- Companies holding unrealized gains on their crypto assets will not pay tax on them as from April 1, 2024.
Japan is reportedly doing away with corporate tax on unrealized profits from cryptocurrency holdings, according to the latest news by local media outlets.
Japan changes corporate tax law on crypto
Per the news updates, companies and institutions holding crypto will not pay tax on their “unrealized gains” from April 2024.
The cabinet approved the tax changes on December 22, local media outlet Nikkei reported. The new tax regime will take effect on April 1, 2024 – the date that Japan’s fiscal year starts.
This follows the Japanese government’s approval of a revision to the country’s tax law as applies to companies that hold digital assets issued by third parties. Companies are set to only get taxed on realized profits- after they sell.
As it stands and per the law, corporate crypto holders are subject to taxation on the “mark-to-market valuation” of their assets every fiscal year. However, with the revision, companies that hold unrealized cryptocurrency profits will not be subject to this tax.
In June, Japan’s tax agency clarified that crypto issuers were no longer subject to the 35% capital gains tax.