Japan National Tax Agency Revised its Corporate Tax Guidelines, Token Issuers Exempted

 In a significant development, Japan’s National Tax Agency made a remarkable move by reviewing its corporate tax guidelines. The most important aspect is the exemption from certain tax obligations granted to token issuers. 

The revised guidelines will provide greater clarity and regulatory support for businesses operating in the token economy.

Notably, since August 2022, legislators in Japan have engaged in discussions regarding new tax regulations for cryptocurrencies as part of a wider tax restructuring plan for 2023. 

However, it was only recently that the tax authority provided its final approval. 

Token Issuers in Japan No Longer Pay Taxes On Unrealized Crypto Gains

According to the law revision by the National Tax Agency on June 20, Token issuers, referring to entities that create and distribute digital tokens, are now exempted from specific tax obligations. 

Japanese companies involved in token issuance will no longer pay the standard corporate tax rate of 30% on their tokens. 

Recall that the Japanese government approved a proposal six months ago, removing the requirement for cryptocurrency companies to pay taxes on theoretical profits (or “paper gains”) from tokens they issued and held. 

This decision paved the way for the recent revision that exempts token issuers from paying tax on paper gains encouraging growth in the digital currency industry.

It is important to note that even unrealized gains were subjected to taxation before this recent development.

Japan Enforces Stricter Anti-Money Laundering Measures to Trace Crypto Transactions

Since the beginning of the year, the crypto industry has been experiencing notable development in Japan, attracting investors and fostering innovation.

According to Kyodo News, on May 23, the Japanese parliament said it would align its legal framework regarding cryptocurrencies with global regulations and standards.

On June 1, lawmakers in Japan implemented more rigorous Anti-Money Laundering (AML) measures specifically targeting cryptocurrency transactions. 

The purpose of these measures is to enhance the ability to trace and monitor transactions involving cryptocurrencies, thereby strengthening the country’s efforts to combat money laundering.

Additionally, in June of the previous year, Japan enacted legislation that banned non-banking institutions from issuing stablecoins. 

This measure was recently implemented, and the bill specifies that only licensed banks, registered money transfer agents, and trust companies can issue stablecoins within the country. 

Japan is among the early adopters of crypto, Blockchain and legalizing it as property. Also, its regulatory measures are among the most difficult ones globally.

The country’s financial regulator, Financial Service Agency, strengthened its crypto rules following the hack on exchanges like Mt.Gox and Coincheck.