Japan’s government has announced that %Cryptocurrency firms operating in the country will be exempt from paying a 30% corporate tax on unrealized gains.
The tax on unrealized gains comes into effect this month under new rules set by Japan’s National Tax Agency. However, the new tax will not apply to companies issuing crypto.
The exemption comes as Japan’s government promotes its blockchain and cryptocurrency sector and tries to lure firms to the country and away from rival Asian financial centre Hong Kong.
Japanese Prime Minister Fumio Kishida supports digital finance and blockchain adoption and sees crypto as an important way to reinvigorate the country’s economy.
While cryptocurrency firms will be shielded from paying the 30% tax on unrealized gains, crypto investors are still subject to a maximum 55% income tax on crypto-related earnings.
The Japan Virtual & Crypto Assets Exchange Association, a lobby group for the crypto industry, is asking the government to also relax trading limits that are in place on digital coins and tokens.
%MitsubishiUFJFinancialGroup ($MUFG), the largest bank in Japan, is reportedly planning to begin issuing stablecoins by year’s end.
Stablecoins are cryptocurrencies that are tied to the value of another asset, typically the U.S. dollar of price of gold bullion.
News of Japan’s tax exemption comes as the price of %Bitcoin ($BTC) hits a 52-week high.
Bitcoin’s price rose as high as $31,410 U.S., surpassing its previous 52-week high of $31,013 U.S., before pulling back to trade around $30,250 U.S.
Bitcoin’s price is now up 82% this year following a slump last fall in the wake of the collapse of the FTX cryptocurrency exchange.
