The Japanese government is working to adjust the taxation of cryptocurrency trading gains at a separate rate of 20%

According to Nikkei News, the Japanese government and the ruling party are working to adjust the taxation policy on cryptocurrency trading income, planning to uniformly impose a 20% income tax rate regardless of the transaction amount, allowing it to enjoy the same treatment as stocks, investment trusts, and other financial products.

This move aims to reduce the tax burden on investors and invigorate the domestic trading market. The Japanese government plans to replace the current comprehensive taxation method with a separate taxation method, meaning that cryptocurrency trading income will no longer be combined with other income such as wages and business income, but will be taxed separately. The government's goal is to include this adjustment in the 2026 tax reform outline, which is expected to be finalized by the end of the year.

Currently, Japan adopts a comprehensive taxation method for cryptocurrency trading income, which combines it with other types of income and applies a progressive tax rate based on the total income amount, with a maximum rate of up to 55%. The Financial Services Agency of Japan plans to submit an amendment to the Financial Instruments and Exchange Act to the Diet during the 2026 regular session, aimed at strengthening strict regulation of cryptocurrency trading.

The amendment will explicitly prohibit insider trading using undisclosed information and require cryptocurrency issuers to fulfill information disclosure obligations. With the advancement of tax reform, it is expected that investment trust products containing cryptocurrency components will also be deregulated in Japan.