Japan is moving toward a major reform of its cryptocurrency tax regime, aiming to apply a flat 20% tax on digital asset gains—matching the treatment of stocks and investment trusts, Nikkei reports. The proposal, backed by the government and ruling coalition, marks the most substantial update to the nation’s crypto policy in years and highlights regulators’ growing view of crypto as a mature, established investment class.
The recommended framework would shift crypto profits into Japan’s separate-taxation category, where certain income streams are taxed independently of wages and business earnings. Under this structure, the 20% levy would be split between central and regional governments at 15% and 5% respectively. Lawmakers plan to include the change in the 2026 tax reform package set for completion at the end of December.
The overhaul would significantly ease the tax burden for retail traders, who are currently subject to progressive rates that can climb as high as 55%—a system widely criticized for discouraging domestic crypto activity.
The timing coincides with rising exchange activity in the country. According to the Japan Virtual and Crypto Assets Exchange Association, spot trading volumes on local platforms topped $9.6 billion in September, reflecting renewed interest in Japan’s regulated crypto market.
