The Japanese government aims to boost Web3 adoption through a proposed tax reform that could waive taxes on unrealized gains from corporate cryptocurrency holdings.
A local report reveals that the government finalized the tax reform outline for fiscal 2024 during a cabinet meeting on December 22.
The current taxation of crypto holdings would undergo a significant change under the proposed reform. Currently, cryptocurrencies held by corporations are treated as profits or losses based on the market value versus book value at the fiscal year’s end.
The new reform suggests exempting companies from taxes as long as they intend to hold cryptocurrencies continuously. This implies that companies would only be liable for taxes when they decide to sell their digital assets and realize gains.
For the reform to take effect, the bill must be submitted to lawmakers in January and receive approval from both the House of Representatives and the House of Councilors. If approved, the reform could come into effect as early as April 2024.
This potential reform could catalyze Web3 adoption in Japan, encouraging companies to view cryptocurrencies as a viable long-term investment.
The move aligns with Japan’s ongoing commitment to Web3, showcased by its October 2022 announcement to invest in NFTs and the metaverse for digital transformation. In February of the same year, Fujitsu and other tech companies collaborated to establish the “Japan Metaverse Economic Zone” and launch various Web3 initiatives.