Financial Services Agency solicits public comments on Cabinet Office Ordinance Amendment Bill regarding corporate taxation of virtual currencies

Corporate tax system for virtual currency

On the 26th, Japan’s Financial Services Agency announced a proposed amendment to the Cabinet Office Ordinance regarding crypto-asset (virtual currency) exchange operators.

This revision bill concerns the revision of the corporate tax law written in the 2024 Tax Reform Outline, which was approved by the Cabinet last month. Public comments will be solicited until February 26th, after which it will be promulgated, enforced, and applied through the prescribed procedures.

connection: The Cabinet approved the 2014 tax reform outline, and corporate crypto assets are no longer subject to end-of-period mark-to-market valuation taxation.

In the FY2018 tax reform outline, crypto assets that are continuously held by a third party other than the issuer will also be exempted from end-of-year mark-to-market taxation if they meet certain requirements. It is written that.

It was decided in the previous year that crypto assets issued by the company itself would be excluded from the scope. With these two rule changes, the Japanese government hopes that the environment for promoting Web3 will improve and the number of businesses that utilize blockchain technology will increase.

Contents of the proposed amendment

The proposed amendment for which the Financial Services Agency is currently soliciting public comments concerns the “certain requirements” mentioned above. The tax reform outline states that only “crypto assets that are subject to transfer restrictions or other conditions” will be exempted from period-end mark-to-market valuation taxation. Specifically, it is a crypto asset that meets the following requirements.

1. There are certain restrictions on the transfer of the crypto assets, such as technical measures being taken to prevent them from being transferred to other parties.
2. In order to have the Certified Fund Settlement Business Association announce that the restrictions in 1 above have been applied, the person who owns the crypto assets must notify the crypto asset exchange service provider that the restrictions in 1 above have been applied. That’s what I’m doing.

The proposed amendment imposes on crypto-asset exchange operators the obligation to provide and publish information regarding crypto-assets with transfer restrictions. The Financial Services Agency has announced that this content will be added to the “Cabinet Office Ordinance on Crypto Asset Exchange Operators.”

Regarding this point, since the content of the tax system was announced, many have pointed out that the requirements for not being subject to end-of-year mark-to-market valuation taxation are strict, such as the need for measures to restrict transfers. As such, there is a possibility that many public comments will be gathered from industry stakeholders.

connection: “Cryptocurrency transactions will be subject to separate self-assessment taxation” Shinkeiren, led by Rakuten and Mikitani, proposes a tax reform plan to the government

Japan’s Web3 Policy Special Feature

The post Financial Services Agency solicits public comments on Cabinet Office Ordinance Amendment Bill regarding corporate taxation of virtual currencies appeared first on Our Bitcoin News.