Japan stays from cryptocurrency controversies and rarely makes it to the news for imposing strict regulations or proposing a ban on it. However, Japan is now coming to the headlines for its revised taxation policies, and cryptocurrency businesses are the worst hit. The extent of the taxation debacle has resulted in many companies leaving the country to set up bases elsewhere. We had seen similar instances in the past when crypto entrepreneurs migrated to Puerto Rico from the United States of America in large numbers owing to tax relaxations.
The new taxation rules came into effect in Japan on 10th December 2021. Businesses are required to pay as much s 55% on capital gains under the new policies. What adds to the woe of entrepreneurs is that once tokens are listed, the tax payment becomes mandatory even in cases of zero sales. It is an unfeasible working model for cryptocurrency firms, considering the high volatility of the market and fear of global regulations. Not only exchanges and businesses, but even investors also have to pay a tax of 35% on all gains. In many cases, both the receiver and the sender have to pay the necessary taxes.
As soon as the revised policies came into effect, companies started to plan their move from Japan. Mai Fujimoto, the founder of Gracone, has already spoken to the media about his plans of relocating. Many other entrepreneurs will soon join him, and Japan will see a mass migration of crypto entrepreneurs and businesses.