Japan Crypto Tax 2026: The July Reform and the Coming 20% Flat Rate
On July 15, 2026, Japan passed the biggest crypto tax reform in its history. Here is what changed, what stays the same until 2028, and how to plan the transition.
What happened in July 2026
On July 15, 2026, Japan's National Diet passed amendments to the Financial Instruments and Exchange Act (FIEA) and the Payment Services Act, reclassifying roughly 105 crypto assets — including Bitcoin, Ethereum and XRP — from "payment tools" to financial products. The new regulatory framework is expected to take effect in fiscal year 2027.
This is a foundational shift: it puts crypto on the same legal footing as regulated securities and paves the way for a dramatically lower tax rate.
How crypto is taxed right now (2026–2027)
For the current tax years, nothing has changed for individuals yet. Crypto gains are still "miscellaneous income" (雑所得), taxed at progressive rates:
| Taxable income (JPY) | Combined rate (incl. 10% local) |
|---|---|
| ¥0 – ¥1,950,000 | 15% |
| ¥3,300,001 – ¥6,950,000 | 30% |
| ¥9,000,001 – ¥18,000,000 | 43% |
| Over ¥40,000,000 | 55% |
No long-term holding benefit, no loss carryforward — every gain is ordinary income.
The game-changer: flat 20.315% from January 1, 2028
Under the 2026 Tax Reform, "specified crypto assets" traded on FSA-registered exchanges are scheduled to move to a flat 20.315% separate self-assessment tax (15% national + 5% local + 2.1% reconstruction surtax) from January 1, 2028, with a 3-year loss carryforward — neither of which exists today.
Corporate holders: unrealized-gains exemption already live
Since April 1, 2026, Japanese companies are exempt from tax on unrealized (mark-to-market) gains on long-term crypto holdings — a change designed to keep crypto businesses onshore.
Tougher penalties
The July 2026 FIEA amendment sharply raised penalties for operating an unregistered crypto business: maximum imprisonment rose from 3 to 10 years and maximum fines from ¥3 million to ¥10 million. Insider-trading rules and issuer disclosures now apply to designated crypto assets.
How to plan the 2026→2028 transition
- If you can defer realizing large gains until the flat rate applies (2028) and your assets qualify, the tax saving can be enormous.
- Use FSA-registered exchanges — only "specified assets" traded there are expected to qualify for 20.315%.
- Track which of your holdings are "specified" vs. not; the effective rate can differ by 30+ points.
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