The complexity of Japan’s cryptocurrency tax system has become a significant concern for investors. A national survey revealed that 22.2% of former crypto holders cited complicated tax rules as their primary reason for exiting the market, while 19.4% pointed to price volatility. Among current investors, 61.4% identified unstable prices and 60% highlighted the intricate tax system as major challenges. In Japan, income from cryptocurrency is classified as “miscellaneous income” and taxed up to 55% after local taxes. Investors must track every transaction, convert profits and losses into yen, and file annual reports. This administrative burden often outweighs investment gains, despite 62.7% of investors aiming for long-term wealth growth and only 15.1% seeking short-term profits. Furthermore, Japan’s Financial Services Agency has proposed reclassifying 105 cryptocurrencies as financial products and reducing the maximum tax rate on crypto income from 55% to 20% to align with stock market tax regulations. These reforms are expected to be legislated by 2026. Given the growing global crypto market, such changes could ease conditions for investors in Japan and help restore market confidence. However, investors are still likely to face price uncertainty and tax complexities.
Source: binance
