Japan Proposes Flat 20% Crypto Tax Rate Starting 2027
Japan's Financial Services Agency (FSA) has proposed a major overhaul of cryptocurrency taxation, replacing the current progressive rate system with a flat 20% tax on crypto profits. The new regime, slated for implementation in 2027, aligns crypto taxation with existing rates for stocks and investment trusts.
The current system treats crypto earnings as miscellaneous income, subjecting traders to tax brackets ranging from 5% to 45%, plus a 10% inhabitant tax for high earners. This disparity has drawn criticism for discouraging domestic crypto investment and driving activity offshore.
The proposed reform follows November 2023 recommendations from the FSA and has gained support from both the national government and ruling coalition. A formal bill is expected to be introduced in early 2026 as part of broader efforts to modernize Japan's crypto regulatory framework.
