Japan Delays Cryptocurrency Tax System Reform – Implementation Pushed Back to 2028

Legislative plans in Japan concerning cryptocurrencies are beginning to take a more realistic shape. According to information from Japanese political circles provided to CoinDesk, the tax reform aimed at introducing a new digital asset taxation system will proceed more slowly than previously anticipated – the implementation is now scheduled for January 1, 2028, instead of the previously speculated 2027.

**Market Expectations vs. Legislative Reality**

Earlier forecasts assumed that with the introduction of the Financial Instruments and Exchange Act regulations next year, the new cryptocurrency tax would come into effect simultaneously. However, the actual schedule is more complex. Decision-makers involved in the process explain that there is a lack of political imperative to accelerate changes. The priority remains on implementing investor protection regulations first, and authorities want to observe the practical effects of the new regulations before launching the tax system reform.

**Current System – A Barrier to Market Development**

Current fiscal arrangements treat profits from cryptocurrency operations as "other income," which is combined with salary and other revenues. This results in progressive taxation that can reach a maximum rate of 55% (including local taxes). Such an approach significantly hampers the dynamic development of the sector and discourages both small investors and professional operators.

**Industry Demands – A Model from Financial Markets**

The cryptocurrency sector has been calling for changes for years. The industry argues that cryptocurrency taxes should be structurally similar to securities trading taxes – a flat rate of 20% calculated independently of other income sources. Such a solution would not only reduce the fiscal burden on market participants but also create more favorable conditions for the development of the digital asset ecosystem in Japan.

Pushing back the implementation of the tax reform to 2028 means that Japanese market participants must prepare for an additional two years of operation under the current, less favorable tax system.