The Japanese government is set to reform its cryptocurrency tax policies by significantly reducing the maximum tax rate on crypto earnings from 55% to 20%. This proposed change is aimed at aligning the tax treatment of cryptocurrencies with that of traditional financial assets, such as stocks. Currently, crypto profits are taxed under a miscellaneous income category, with the highest tax rate applied to earnings over 200,000 yen (approximately $1,377)​.

The Financial Services Agency (FSA) of Japan is spearheading this initiative as part of a broader fiscal overhaul planned for 2025.

The new tax regime would introduce a flat 20% rate for individual crypto investors, addressing long-standing concerns from industry advocates and the Japan Blockchain Association.

In addition to benefiting individuals, the reform would also ease the tax burden on corporations holding cryptocurrency, which are currently subject to a flat 30% tax​.

The proposed tax reduction is seen as a positive step for encouraging further crypto adoption and investment within Japan, particularly as the country looks to position itself as a leader in digital finance​.

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