Reform would align digital-asset taxation with stock investments and replace a rate that currently reaches more than 50%
Japan is preparing to overhaul how it taxes cryptocurrency profits, with government leaders now supporting a nationwide shift to a flat 20% levy — a substantial reduction from the current tiered system that can reach as high as 55%. The policy is expected to be formalized in legislation slated for 2026.
The plan, championed by Japan’s Financial Services Agency (FSA), seeks to harmonize digital-asset taxation with the treatment of equities and investment funds. Under today’s rules, crypto trading falls under “miscellaneous income,” subjecting individuals and businesses to a sliding tax scale between 5% and 45%, plus an additional 10% resident tax for high earners. Financial assets such as stocks, by contrast, face a uniform 20% tax on gains.
Officials say the proposed shift reflects an effort to bring clarity and consistency to the market. “A standardized framework removes unnecessary complexity and helps investors understand their obligations,” .
The FSA intends to submit the reform bill during the 2026 regular Diet session as part of broader amendments to the Financial Instruments and Exchange Act. The legislative package is expected to include new guardrails for crypto trading, including strengthened disclosure rules and restrictions on using non-public information.
Industry groups have long argued for such changes. The Japan Blockchain Association has repeatedly warned that high tax burdens have discouraged both retail participation and Web3 entrepreneurship. A market consultant said the new framework could “shift sentiment materially, especially for domestic firms weighing whether to build inside or outside Japan.”
If approved, the new tax regime would mark Japan’s most consequential digital-asset policy update in years.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.