"Japan's ruling party mulls corporate tax exemption for corporate cryptocurrency holdings outside of short-term trading"

"Lawmakers from Japan's ruling Liberal Democratic Party and its coalition partner, the New Komeito, are discussing a tax reform proposal that would exempt Japanese companies from paying taxes on unrealized gains from cryptocurrency holdings," Japanese local media Nikkei Asia reported on June 6. The proposal is expected to be included in the fiscal year 2024 tax reform plan, which is expected to be released this month. Specifically, the reform would exempt companies that hold cryptocurrencies for purposes other than short-term trading. In this case, the value of the cryptocurrency held by the company will be assessed based on the market price at the end of the fiscal year and will be exempt from corporate tax. Currently, Japan is one of the few countries that taxes cryptocurrency holdings, other than self-issued coins by local companies, based on market valuation. "The ruling party's discussion of a more crypto-friendly tax system is a move to reverse the outflow of startups to crypto-friendly countries such as Singapore, Dubai, and Switzerland as they feel burdened by the taxation environment," the media reported.