Japan’s Taxes on Crypto Firms Are Leading Some to Leave the Country

Crypto companies in Japan have implored authorities to change tax policies that some say are driving them out of the country. Recent government policy announcements indicate their calls are unheeded.

On Dec. 10, Japan’s ruling coalition approved a tax plan for the 2022 fiscal year that continues to treat token listings as taxable. Once tokens are listed on an active market, issuers are liable to pay tax even if they don’t sell.

A project that lists some of its tokens on exchanges and keeps the rest in its treasury also has to pay taxes on what it holds if its market value goes up.

If the core team doesn’t have the funds to pay the taxes, as is often the case with early-stage startups, it is forced to sell more tokens to public markets. This adversely affects both the token price and the overall health and trajectory of the project.

Certified tax accountant Kenji Yanagisawa told CoinDesk that the tax rate for the token issuer is around 35%.

If a token issuer airdrops a token, both the issuer and the recipient are taxed.

The current taxation regime “will not change for at least another year,” Yanagisawa said.

Source: https://www.coindesk.com/policy/2021/12/23/japans-taxes-on-crypto-firms-are-leading-some-to-leave-the-country/