The Japanese government is working on adjusting the separate 20% tax rate levied on profits from cryptocurrency transactions.

According to Odaily, the Japanese government and ruling party are adjusting their tax policy on cryptocurrency trading gains, planning to apply a uniform 20% income tax rate regardless of the transaction amount, treating it the same as other financial products such as stocks and investment trusts. This move aims to reduce the tax burden on investors and revitalize the domestic trading market. The Japanese government plans to replace the current comprehensive taxation method with a separate taxation approach, meaning that cryptocurrency trading gains will no longer be combined with other income such as wages and business income, but will be taxed separately. The government aims to include this adjustment in the 2026 tax reform outline, which is expected to be finalized by the end of the year. Currently, Japan uses a comprehensive taxation method for cryptocurrency trading gains, which combines them with other types of income and applies a tiered tax rate based on the total income amount, with the highest rate reaching 55%.

Japan's Financial Services Agency plans to submit an amendment to the Financial Instruments and Exchange Act to the Diet at its regular session in 2026, aiming to strengthen the strict regulation of cryptocurrency trading. The amendment will explicitly prohibit insider trading using undisclosed information and stipulate that cryptocurrency issuers must fulfill their information disclosure obligations. With the advancement of tax reforms, it is expected that investment trust products containing cryptocurrency components will also be deregulated in Japan.