Japan’s ruling party has agreed to loosen corporate tax restrictions for digital currencies, demonstrating support for a sector that has been rocked by a series of disruptive events.
In July, the Japan Cryptoasset Business Association and the Japan Virtual and Cryptoassets Exchange Association put out a proposal to make it cheaper for companies to issue and hold cryptocurrency tokens.
The Liberal Democratic Party’s tax committee adopted the proposal on Thursday to exempt corporations from paying taxes on paper gains on crypto coins they hold after issuing them.
Akihisa Shiozaki, an LDP lawmaker and member of the party’s Web3 project team, described it as a “huge stride.” He added that it would become easier for diverse businesses to carry out business that involves the issuance of tokens.
The move demonstrates that Japanese policymakers continue to rely on crypto technology to foster growth, despite recent events such as the FTX collapse that sent shockwaves through the market. Currently, Japan’s corporate tax rate on cryptocurrency profits, including unrealized gains, is 30%.
Based on the party’s decisions, Prime Minister Fumio Kishida’s administration will complete its yearly tax policy guidelines by the end of the year. In most cases, the government proposes legislation to parliament in January to update tax regulations for the new fiscal year, which begins on April 1.
The proposed changes will support Prime Minister Fumio Kishida’s efforts to revitalize Japan’s economy.
In June, Japan passed laws officially defining stablecoins as digital currencies, making it one of the first major world economies to establish a legal framework for stablecoins.
According to the law, stablecoins must be connected to legal cash and guarantee that holders can redeem them at face value. It also states that stablecoins can only be issued by regulated banks, trust firms, and authorized money transfer businesses.
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