Japanese Upper House: "Pushing for Reclassification of Virtual Assets... Considering a Reduction in Tax Rate from 55% to 20%"

The Japanese government is set to implement a reclassification of major virtual assets (cryptocurrencies) including Bitcoin (BTC) and Ethereum (ETH). This has drawn attention to whether Japan will lower the tax rate currently imposed on cryptocurrency income.

On the 25th (local time), during Tokyo WebX, Satsuki Katayama, chairperson of the Financial Research Council of the Liberal Democratic Party, stated, "We are reviewing a proposal to shift the classification of cryptocurrency income from the Payment Services Act to the Financial Instruments and Exchange Act," and added, "This reform has already been decided upon by the Cabinet and is expected to be implemented within one to two years."

Currently, Japan classifies cryptocurrency income as comprehensive taxation, applying a maximum tax rate of 55%. However, if the Financial Instruments and Exchange Act is applied to cryptocurrency income, a separate tax rate of 20%—the same as for stock and bond investments—would apply.

Chairperson Katayama also explained, "Since the Liberal Democratic Party has lost its position as the majority in the Diet, negotiations with other parties will be necessary to implement this reform. Nevertheless, since several parties already share the same view, progress is expected."