- A major adjustment affecting firms holding crypto assets comes with this change.
- The Japan Crypto Asset Business Association (JCBA) had asked for this tax change.
The Japanese government adopted the framework for crypto tax reform for fiscal year 2024 at a cabinet meeting that took place on December 22nd. A major adjustment affecting firms holding crypto assets comes with this change.
Corporations owning virtual currencies issued by third parties are no longer subject to the period-end mark-to-market valuation tax, according to the change.
Easing Tax Burden
Moreover, this means that, similar to how individual investors are taxed, businesses will only pay taxes on the money they make from selling virtual currencies and tokens. Also, the purpose of this change is to make it easier for companies to pay taxes on crypto assets they own and operate.
The Corporation Tax Law’s period-end mark-to-market calculation is subject to change as a result of this adjustment. In the past, companies would report their financial results for the fiscal year by subtracting the book value of their cryptocurrency holdings from their market value. Assuming the asset is held continuously, the new policy does not include this mark-to-market value.
The Japan Crypto Asset Business Association (JCBA) had asked for this tax change for 2024, and this is one way it would be implemented. This shift will help local firms that use blockchain technology thrive, as well as bring in initiatives from across the world.
The only virtual currencies that were not subject to mark-to-market taxes in last year’s tax overhaul were those issued by companies themselves. This year’s modification was prompted, however, by the increasing demands for parity with other firms’ cryptocurrencies.
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