Japan's Financial Services Agency (FSA) is mulling a change in the tax treatment of cryptocurrencies, potentially classifying them as financial assets rather than income. This shift could result in lower tax rates for high-earning crypto investors, who currently face income tax rates of up to 45% on their crypto profits.

The FSA noted that treating crypto as financial assets "is necessary to consider" as the agency examines potential tax reforms. Currently, crypto profits in Japan are taxed as income, but the FSA believes crypto assets could "contribute to the expansion of wages and the creation of household assets" if the tax regime is adjusted.

The potential change comes after Japan has reviewed its crypto tax policies over the past two years, a period during which some crypto companies reportedly left the country due to the high tax burden. Last year, Japan announced that crypto issuers would no longer pay taxes on unrealized gains, a move aimed at supporting the industry's development.

Source: https://www.coindesk.com/policy/2024/09/04/japans-financial-regulator-mulls-taxing-crypto-as-a-financial-asset/

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