Japan's tax reform is considering adopting a separate taxation system for virtual currencies, supporting the carry-forward of losses over three years.

Odaily Planet Daily reports that Japan's Liberal Democratic Party and the Japan Restoration Party released their tax reform outline for fiscal year 2026 on December 19. The outline proposes classifying virtual currencies as financial products that contribute to the accumulation of public assets and is considering applying the same separate taxation system to virtual currency income as to stocks and investment trusts.

According to the outline, spot trading, derivatives trading, and ETFs of virtual currencies are listed as separate taxable items, and losses from virtual currency trading can be carried forward for three years. Furthermore, financial products investing in virtual currencies are also included. Currently, the plan does not explicitly mention the tax details for NFTs and rewarded transactions such as staking and lending. The outline also mentions that future earnings from virtual currencies may be subject to taxation when transferred overseas. (CoinPost)