Japan Plans to Slash Crypto Tax to Flat 20% by 2026

Japan plans to cut crypto tax to a flat 20% by 2026, simplifying rules and boosting investor confidence and market growth.

Japan is planning a major change in how it taxes cryptocurrency profits. The government has made some proposals to lower the tax on crypto gains from as high as 55 percent to a flat rate of 20 percent by fiscal year 2026. This isn’t a mere tax-cut. It indicates that Japan is taking a fresh look at its whole approach to digital assets.

Japan Proposes Fairer Crypto Tax System to Boost Investor Confidence

Currently, crypto is taxed as Other Income. This means that often the high earners are paying the top tax rate. Because of this, many traders have taken their business overseas. In fact, currently, only 13 percent of people in Japan own cryptocurrency. The new plan is attempting to correct this by treating crypto gains much more like profits on stocks, which are taxed at a flat rate. This would make the system simpler and fairer to investors.

At the same time, Japan is reacting to global trends. Other countries are also revising their crypto tax laws. For example, Singapore reduced the goods and services tax on crypto to zero in August 2025. On the other hand, Japan has experienced a 12 percent decline in crypto activity since 2023. This data is collected from the Japan Virtual Currency Exchange Association. That decrease is one reason the law’s makers want to make taxes easier and better.

Related Reading: India to Adopt Global Crypto Tax Reporting Rules by 2027 | Live Bitcoin News

Support for such a change is increasing. Businesses and individuals are not waiting for action. Metaplanet, a Japanese company, purchased 103 Bitcoins in July 2025. This indicates that companies are more confident about the future of crypto in Japan. Also, the Bank of Japan said there has been a 15 percent increase in digital asset questions from banks and other financial institutions. That’s a sure sign the interest is coming back.

In addition, many crypto traders from Japan moved to places like Dubai in recent years. In 2024 alone, some 8,000 traders left the country, according to Nikkei Asia. If Japan changes its tax laws, some of these people may come back. This would introduce money and innovation back into the Japanese economy.

Simplified Crypto Taxes May Revive Japan’s Stagnant Digital Asset Market

The new tax rules could also help Japan’s aging population. Nearly 29 percent of the citizens in Japan are above the age of 65 years. A simpler system might get more older people to invest in digital assets for retirement. The reform also reflects what Japan has learned from what happened in the past, such as the Coincheck hack in 2017, where more than $500 million was stolen. Since then, Japan has been strict with the laws regarding crypto, but now it wants to find a balance between safety and growth.

One more important part of the plan is a new rule that will allow investors to carry losses forward for three years. This means that they can use past losses to lower the amount of taxes they pay on future gains. The U.K. began a similar policy in June 2025. This allows people to more easily stay in the market during tough times.

If the plan is approved, Japan could become a leader in digital finance for the world. The crypto world is keeping a keen eye to see what happens next. For now, this proposal could be the key in bringing in new energy to Japan’s crypto sector.