The Japanese government now backs a Japan crypto tax reform that would cap crypto profits at a 20% tax rate. The change would replace the current tiered structure, where total tax on crypto income can reach about 55% for top earners.
According to Nikkei Asia, the government and the ruling coalition in the National Diet support the 20% crypto tax plan that the Japan FSA first put forward in mid-November.
The Japan FSA signaled that it wants a flat 20% crypto tax on capital gains from digital assets. It plans to bring a bill to the Diet in early 2026, as part of a broader package.
The new Japan crypto tax structure would apply to profits from trading and investing in cryptocurrencies. It would move those profits into the same tax bucket as other financial instruments.
The shift would mark a clear break from the current practice of treating crypto as miscellaneous income. It would also create one clear headline rate for the Japanese government crypto profits tax on digital assets.
Japan Crypto Tax Shift Aligns With 20% Rate On Stocks
Under current rules, Japan crypto tax treatment places digital asset profits under “miscellaneous income.” Tax officials add those amounts to salaries and other income.
The combined rate runs from 5% at the lower end to 45% at the higher end. In addition, some high-income taxpayers pay an extra 10% inhabitant tax, which goes to local governments.
Because of this system, the effective Japanese government crypto profits tax can climb close to 55% for large gains. That level differs sharply from how Japan treats stocks and funds.
By comparison, equities and investment trusts face a simple flat 20% tax on profits. Authorities treat those gains separately from ordinary income. The amount of profit does not move the taxpayer into a different band.
With the new 20% crypto tax, the Japan FSA wants to align crypto with those products. The proposal would bring Japan crypto tax rules closer to the framework used for equities.
As a result, crypto traders and long-term holders would see their gains taxed at the same 20% rate as stock investors. The change would remove the jump from moderate rates to very high brackets on larger crypto gains.
This alignment would also simplify planning for taxpayers who hold both stocks and crypto under the Japanese government crypto profits tax regime.
Japan Blockchain Association Drove 20% Crypto Tax Debate
The Japan Blockchain Association (JBA) has played a visible role in pushing for the Japan crypto tax reform. It has called for a 20% crypto tax for almost three years.
The JBA acts as a key lobbying group for domestic Web3 and crypto businesses. It has warned that high Japanese government crypto profits tax levels make it harder to operate those businesses inside the country.
In July 2023, the Japan Blockchain Association published a letter on its website. The document asked the government to align Japan crypto tax rules with other investments at a 20% rate.
“This letter requests a review of tax on crypto assets, which is the biggest hurdle for companies operating Web3 businesses in Japan and a disincentive for the public to actively own and use crypto assets,”
the JBA wrote.
The letter framed high Japan crypto tax burdens as a barrier for both companies and everyday users. It highlighted that many other investment products already enjoy a flat 20% tax.
Although it is not clear whether the Japan FSA directly followed the JBA proposal, the timeline shows a shift. By September 2024, the Japan FSA began openly talking about crypto tax reform.
Now, with the Japanese government crypto profits tax plan set at 20% and backed by the ruling coalition, the long-running Japan crypto tax debate has turned into a concrete legislative project.
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Tatevik Avetisyan is an editor at Kriptoworld who covers emerging crypto trends, blockchain innovation, and altcoin developments. She is passionate about breaking down complex stories for a global audience and making digital finance more accessible.
📅 Published: December 2, 2025 • 🕓 Last updated: December 2, 2025
