Japan Unveils Plan to Cut Crypto Taxes to 20% in 2026 Reform Blueprint

Source: DefiPlanet Original Title: Japan Unveils Plan to Cut Crypto Taxes to 20% in 2026 Reform Blueprint Original Link:

Quick Breakdown

• Japan plans to cut crypto capital gains tax to 20% under its 2026 tax reform, down from the current rate of up to 55%.
• The tax cut applies only to “specified crypto assets” handled by registered financial operators.
• Investors will benefit from a three-year loss carryover rule and expanded access to crypto-based investment trusts and ETFs.

Japan is preparing a major overhaul of its crypto tax regime, proposing a sharp reduction in capital gains tax on digital assets as part of its 2026 tax reform blueprint.

Under the proposal, profits from cryptocurrency trading would be taxed at a flat 20%, a dramatic shift from the current system, where gains can be taxed as high as 55%. The move is aimed at reviving domestic crypto trading and aligning digital assets with traditional investment products such as equities and investment trusts.

Crypto Tax Cut aims to reignite investor participation

According to a Nikkei report on Monday, the Japanese government plans to classify cryptocurrencies under a new legal category, allowing them to be taxed separately from miscellaneous income.

🚨 BREAKING

🇯🇵 JAPAN MOVES AHEAD OF SCHEDULE TO CUT ETHEREUM TAX

FROM 55% → 20%

MASSIVELY BULLISH FOR CRYPTO 🇯🇵🚀

The reform would bring crypto taxation in line with stocks and mutual funds, a change that has drawn intense interest from local investors who have long complained that Japan’s steep tax rates discourage participation.

Kimihiro Mine, CEO of fintech firm finoject, said the revised framework could improve public confidence in digital assets.

“With cryptocurrencies now subject to the revised Financial Instruments and Exchange Act, investor protection measures are being strengthened, making crypto easier for many people to accept.”

Mine said.

Tax relief applies only to ‘specified’ crypto assets

However, the tax cut will not apply to all cryptocurrencies. The reform is limited to “specified crypto assets” handled by companies registered under Japan’s Financial Instruments Business Operator Registry, the report noted.

While major cryptocurrencies such as Bitcoin and Ethereum are expected to qualify, authorities have yet to clarify the exact criteria businesses must meet to fall under the new system.

Loss carryovers and crypto investment trusts approved

The reform also introduces a three-year loss carryover rule for crypto trading. Losses incurred from buying or selling digital assets can be carried forward and deducted for up to three years starting in 2026.

In addition, Japan will allow the creation of investment trusts that include cryptocurrencies. The country has already launched its first XRP exchange-traded fund (ETF) and plans to introduce two more ETFs offering exposure to specific crypto assets.