The Japanese government is working on adjusting the taxation of income from Crypto Assets trading at a separate rate of 20%.

[The Japanese government is working to adjust the taxation of income from crypto asset transactions at a 20% tax rate separately] According to Nikkei News, the Japanese government and the ruling party are working to adjust the tax policy for income from crypto asset transactions, planning to uniformly levy income tax at a 20% tax rate regardless of the transaction amount, allowing it to enjoy the same treatment as other financial products such as stocks and investment trusts. This move aims to reduce the tax burden on investors and activate the domestic trading market. The Japanese government plans to replace the current comprehensive taxation method with a separate taxation method, meaning that income from crypto asset transactions will no longer be combined with other incomes such as wages and business income, but will be taxed separately. The government's goal is to incorporate this adjustment into the 2026 tax reform outline, which is expected to be finalized by the end of the year. Currently, Japan adopts a comprehensive taxation method for income from crypto asset transactions, meaning that it is combined with various other incomes and subject to a progressive tax rate based on total income amount, with the highest rate reaching 55%. The Financial Services Agency of Japan plans to submit an amendment to the Financial Instruments and Exchange Act to the Diet during the regular session in 2026, aiming to strengthen strict regulation of Crypto Assets trading. The amendment will explicitly prohibit insider trading using undisclosed information and require Crypto Asset issuers to fulfill information disclosure obligations. With the advancement of tax reform, it is expected that investment trust products containing Crypto Asset components will also be deregulated in Japan.