Japan Aligns Crypto Taxes With Traditional Investments
Japan is preparing to implement a flat 20% tax on cryptocurrency gains, marking one of the country’s most significant updates to digital asset regulation in years. The new proposal, backed by the government and ruling coalition, aims to shift crypto earnings into a separate-taxation framework, treating digital assets similarly to equities and investment trusts.
Under the upcoming reform, the 20% tax rate would be divided between national and regional authorities—15% going to the central government and 5% to local jurisdictions. This change is expected to be officially included in the 2026 tax reform package, signaling Japan’s growing recognition of crypto as a mainstream investment class.
Lower Tax Burdens Could Boost Domestic Crypto Activity
At present, retail traders can face progressive tax rates that climb as high as 55%, a structure often cited as a major barrier to domestic crypto participation. The move to a flat 20% rate is designed to create a more competitive environment and encourage traders to stay active within Japan rather than moving to more favorable overseas markets.
The timing also aligns with the steady expansion of Japan’s regulated crypto sector. According to the Japan Virtual and Crypto Assets Exchange Association, local exchanges reported more than $9.6 billion in spot trading volume in September alone, highlighting increasing interest among investors.
By modernizing its tax rules, Japan aims to strengthen its position as a crypto-friendly nation, offering clearer guidelines and a fairer system for both retail traders and long-term digital asset investors.
