Japan’s Virtual Asset Tax May Be Reduced to ‘20%’… Next Year’s Tax Reform Outline Finalized

The 2025 tax reform outline for Japan has been finalized at the Tax System Research Council General Meeting of the Liberal Democratic Party and Komeito. As the outline specifies a review of the virtual asset income tax, expectations among Japanese virtual asset investors are rising.

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According to a report by CoinPost on the 0th (local time), the Liberal Democratic Party mentioned in the tax reform outline, “Virtual assets contribute to the formation of national assets as financial products, and we will consider establishing legal frameworks such as investor protection explanations and regulations similar to other financial products with tax exemptions like listed stocks, as well as obligations to report to tax authorities.”

Additionally, Takuya Hirai, the inaugural Digital Minister of the Liberal Democratic Party’s Digital Headquarters, requested through the Financial Minister’s proposal to △ designate gains and losses from virtual asset transactions as subject to separate taxation △ organize regulations related to virtual assets △ prepare for cybersecurity as assets contributing to the national economy.

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The media predicted, “The inclusion of tax content related to virtual asset transactions in this Liberal Democratic Party’s tax reform outline will serve as a foundation for specific institutional reforms such as future tax rate reviews, adjustment of gain and loss rules, and changes in tax classification.”

Currently, income from virtual asset transactions in Japan is classified as ‘miscellaneous income’ and is subject to a maximum tax rate of 55%. With this tax reform proposal, the possibility of promoting a 20% separate taxation and a carryover system for gains and losses is increasing, raising expectations among Japanese virtual asset investors and industry stakeholders.