Upcoming Change to Crypto Tax in Japan – What Investors Should Know

Japan’s financial regulator, the FSA, is working to reclassify cryptocurrencies such as Bitcoin and Ethereum as regulated financial products. As part of this overhaul, crypto profits may be taxed under a flat 20% “separate taxation” regime — instead of the current “miscellaneous income” system with rates up to 55%.

The reform is expected to be included in the 2026 tax package and may take effect as early as 2026 or 2027, depending on parliamentary approval. Exact details — such as which crypto assets are covered, reporting requirements, and rules on offsetting losses — are still under negotiation.

Until the law is finalized, the existing tax regime remains in place. Investors should monitor developments closely and consult a tax professional when declaring crypto gains.