Japan plans a 20% flat tax on crypto gains in 2026, aligning with stock taxes and aiming to revive trading and attract institutional products.
Summary
- Japan plans to shift crypto from progressive rates up to 55% to a flat 20% levy, split 15% to the central government and 5% to local authorities.
- Lawmakers expect lower taxes to revive domestic trading, spur blockchain innovation, and draw in asset managers like Nomura, Daiwa, MUFG, and Amova.
- The FSA is preparing rules for 105 listed tokens, including BTC and ETH, treating them as financial products under insider trading regulations.
Japan is preparing to overhaul its cryptocurrency tax rules by introducing a flat 20% levy on trading gains, placing digital assets on equal footing with stocks and other mainstream investments, according to a report by Nikkei.
Under the proposal, income from cryptocurrency trading would no longer be combined with salaries or business earnings. Instead, it would fall under a separate taxation scheme, with 15% of revenue directed to the central government and 5% allocated to prefectural and municipal authorities.
Japanese tax authorities to tax Bitcoin 20%
The reform is expected to be written into Japan’s 2026 tax policy outline, due later this year. Currently, profits from digital assets are taxed at progressive rates that can reach as high as 55%, depending on total income. Gains from equities and investment trusts are taxed at a uniform 20%.
Lawmakers backing the proposal have stated that lowering the tax burden could revive trading activity in the domestic market and ultimately lead to higher overall tax revenue. Supporters also view the reform as a way to encourage innovation across the broader technology sector, including companies building services around blockchain infrastructure.
The effort reflects a broader government view that cryptocurrencies have evolved into a standard investment category rather than a fringe asset class, according to officials.
Data from the Japan Virtual and Crypto Assets Exchange Association indicate there are approximately eight million active crypto accounts in the country.
Nomura Asset Management has formed a cross-division task force to prepare product strategies for a post-regulatory-change environment, while Daiwa Asset Management is coordinating with ETF specialist Global X Japan. Mitsubishi UFJ Asset Management and Amova Asset Management are also evaluating fund lineups for both retail and institutional investors.
Asset managers face practical challenges including determining pricing benchmarks, ensuring sufficient acquisition speed to match investor flows, and implementing custody and security systems. The volatility of digital assets remains a concern.
Separately, the Financial Services Agency is drafting measures that would cover 105 cryptocurrencies listed domestically, including Bitcoin (BTC) and Ethereum (ETH) , treating digital assets as financial products subject to insider trading laws.