The Japanese government plans to upgrade its cryptocurrency taxation laws for the fiscal year 2023. The country’s Ministry of Economy, Trade, and Industry (METI) and the Financial Services Agency will be introducing reforms for crypto-asset corporations’ growth. This move is aimed at strengthening startups in the country.

One of Japan’s news agencies [reported](https://www.yomiuri.co.jp/economy/20220824-OYT1T50011/) about the changes in the laws. With the implementation of these reforms, Japanese corporations dealing in virtual currencies are likely to get over 20% relief. 

## Suggested changes by JCBA and JVCEA

Earlier, two major digital asset advocacy groups [shared a proposal](https://cryptocurrency-association.org/cms2017/wp-content/uploads/2022/08/JCBA_taxreform2023_press-7.pdf). Now, laws for crypto tax in Japan might see reforms. The Japan Crypto-Asset Business Association (JCBA) and the Japan Crypto-Asset Exchange Association (JVCEA) campaigned to lower corporate cryptocurrency taxes. 

The proposal demanded creating ease for tax filers. They proposed that improvements are necessary to support the [web3](/articles/learn-moni/web-3.0-crypto) and blockchain industry in the country. 

## Amendments in crypto tax in Japan

Here are some of the proposed amendments to crypto tax in Japan for the year 2023: 

1.	The new law will lower the tax on digital assets from 55% to only 20% for startups.

2.	Taxes will not be applied to unrealised gains on digital assets at the end of the fiscal period.

3.	Only Profits that are generated from trading will be taxed.

4.	Firms will have the option of carrying losses for the following three years.

5.	The laws will apply not only to cryptocurrencies but also to their derivatives.  

## Remarks from Hiroshi Mikitani

Prior to this news, the president of Rakuten Group shared his thoughts on the matter at a conference. While admitting the harsh regulations on virtual currencies, Hiroshi Mikitani said, “it’s stupid to start a business in Japan”. 

He also mentioned that firms should move their operations to other countries because of the regulations. In the last year, [crypto tax evasion](/news/article/crypto-tax-japan) has been a significant concern for the Japanese government, carrying out large-scale investigations in the Kanto region and other areas. 



Crypto Tax: Japan plans for significant reforms

Blockchain use cases grow as the technology enters new domains. The tokenised and reward-based system increases its applications and helps bring positive societal changes.

One such application of blockchain is move-to-earn. These applications encourage people to walk more and earn tokens as incentives.

Recently, [STEPN](https://www.stepn.com/) has risen in popularity among the move-to-earn apps. It is a Web3-based lifestyle app that includes GameFi as well as SocialFi. It is one of the notable use cases as it is built with the idea of promoting a healthy lifestyle.

## Tokenomics of STEPN App

Its tokenomics involves two tokens; Green Satoshi Token (GST) and Green Metaverse Token (GMT). You can earn GST through the games, whereas GMT is a governance token you can get through events or earn after crossing 30 levels. 

You also have non-fungible tokens (NFTs) as your sneakers. Initially, you have to purchase sneakers to start walking, jogging, or running with STEPN. They have different types and attributes that help with the game modes. Also, you can burn your GSTs to upgrade or mint sneakers.

## Mainstreaming STEPN in Japan

Recently, STEPN has been working to spread the use of the app in Japan. For this reason, it is looking to partner up with the LINE blockchain. LINE is one of the known Japanese tech corporations for decentralised application development. It has agreed to work with the fitness lifestyle app to bring it to the mainstream in Japan. 

Find Satoshi and LINE Xenesis have signed an MOU to introduce STEPN in the Japanese market. It is an already popular app in the country, and this agreement will further help promote it throughout Japan. 

The CEO and Representative Director of LINE Xenesis, Lim Inkyu, has shared his thoughts about this development. He believes the app is an ideal example of [Web3](/articles/learn-moni/web-3.0-crypto) usage in the real world. He also mentioned that this collaboration might lead to more blockchain and Web3 use cases for the people of Japan.


Blockchain Use Cases: Move-to-Earn Apps

MTax authorities in Japan have been investigating tax evasion of cryptocurrency transitions. The numbers have been up for discussion as a whole lot of people have been reporting lower gains than they actually made.

The National Tax Agency has already investigated a grand total of 1600 people this year. They were checking into the claims from last tax season, according to the Nikkei Asian Review . After that, about 250 more cases will be investigated. These investigations will continue through the next year as well.

## Failing to File Means Penalties

Cryptocurrency exchanges in Japan are obligated to file user tax reports by February 15th of every year . If you fail to do so, it’s possible that you’ll face penalties or even jail time if proven guilty.

Japanese authorities carried out a large-scale investigation in the Kanto region, including cities such as Saitama, Tochigi, Gunma, Niigata and Nagano. They found that only about 20% of cryptocurrency investors reported their gains or losses on crypto assets.

This was possible through a new system where exchanges match up data supplied by users and what they actually owe to the government.

More [Business news](/news/category/crypto-business-news).

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