Japan Cuts Crypto Tax to 20% in 2026 Tax Reform Blueprint
Japan plans to cut crypto tax rates from 55% to a flat 20% in 2026. The ruling coalition released a tax reform blueprint on December 19.
Japan’s new flat crypto tax
Japan plans a flat 20% tax on gains on specified crypto assets from fiscal year 2026, replacing a progressive rate that reached up to 55%. The current system treats crypto gains as “miscellaneous income” under Japan’s income tax law. The new measure aligns crypto with listed stocks, which already use a 20% separate tax for capital gains and dividends. The reform applies only to specified crypto assets handled by licensed operators under financial law.
Reclassification under financial instruments law
Japan plans to treat certain cryptocurrencies as financial products under the Financial Instruments and Exchange Act (FIEA), which is Japan’s core securities framework. Under the plan, about 105 cryptocurrencies listed on registered exchanges gain this status and fall under investment product rules. This change places these assets under securities-style supervision and investor rules already used for stocks and investment trusts. The tax blueprint states that only “specified crypto assets” under FIEA and handled by registered businesses receive the 20% separate tax treatment.
The healthy development of Web 3.0, including crypto assets, is extremely important. — Shigeru Ishiba, Prime Minister of Japan
Details, exclusions and remaining gaps
The ruling Liberal Democratic Party and Japan Innovation Party endorsed the tax blueprint on 19 December 2025, ahead of the fiscal 2026 budget debate. The outline mentions loss carryforward for eligible crypto trades, so traders offset approved losses against future gains under defined conditions. It does not clearly include non-fungible tokens (NFTs), which represent unique digital items, or staking and lending rewards, which remain in a grey area. The final scope of assets and detailed rules depends on implementing laws passed by the Diet for fiscal year 2026.