Japan Considers Tax Reform for Cryptocurrency Income

According to ChainCatcher, Japan's Liberal Democratic Party and the Japan Innovation Party have proposed classifying virtual currencies as financial products that aid in public asset accumulation in their 2026 fiscal year tax reform outline. The proposal suggests applying a separate taxation system to cryptocurrency income, similar to that of stocks and investment trusts. The outline specifies that spot trading, derivatives trading, and ETFs involving virtual currencies would be subject to separate taxation. Additionally, losses from cryptocurrency trading could be carried forward for three years. Financial products investing in virtual currencies are also included in the proposal. However, the outline does not clearly address the taxation details for NFTs or reward-based transactions such as staking and lending. It also mentions that future gains from virtual currencies may be subject to taxation when transferred overseas.