Japan Plans Flat 20% Crypto Tax In Major Boost To Local Traders

Japan is reportedly preparing to overhaul its crypto-taxation framework by introducing a flat 20% levy on digital-asset gains, according to a report from Nikkei.

The reform would bring crypto taxes in line with equities and investment trusts, marking the most substantial policy update for the sector in years. Regulators increasingly view digital assets as a mature investment class, prompting support from both the government and the ruling coalition.

Under the new structure, cryptocurrency profits would fall under Japan’s “separate-taxation” system, in which specific income types are treated independently from wages and business earnings. The 20% rate would be divided between national authorities (15%) and regional governments (5%). The reform is expected to be drafted into the 2026 tax package finalised in December.

Currently, retail investors face progressive tax rates that can climb to 55%, significantly limiting domestic participation. The update comes as regulated Japanese exchanges report rising volumes, with spot trading surpassing $9.6 billion in September—evidence of increasing local market engagement.

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