Japan to introduce a single 20% tax rate on cryptocurrency income, bringing it into line with stocks

The Japanese government is officially pushing ahead with a plan to significantly overhaul the tax system for cryptocurrency profits, which has previously been subject to a maximum tax rate of 55%, and unify it into a single tax rate of 20%, the same as for stocks.
On the 1st (local time), Cointelegraph reported that the Japanese government and ruling party support a proposal to change the tax rate on cryptocurrency profits from the current progressive tax rate to a single 20% rate.
This is an amendment that was first proposed by the Financial Services Agency (FSA) in mid-November last year, and is part of a move aimed at submitting related legislation in early 2026.
The purpose of this amendment is to bring virtual currencies into line with the tax system for existing financial products such as stocks and investment trusts.
Currently, in Japan, income from virtual currency transactions is considered "miscellaneous income" and is included in the comprehensive income tax for individuals and corporations, so the tax rate ranges from 5% to a maximum of 45%.
In this case, a 10% local tax is added, bringing the tax rate up to 55%. On the other hand, stocks and investment trusts are subject to a separate tax rate of 20% regardless of the profit size. This difference is what affects the cryptocurrency market.
The industry has been criticized for suppressing investment. According to the Nikkei Shimbun, the proposed amendments were presented as part of the "Investor Protection Framework" for the revision of the Financial Instruments and Exchange Act, which is being promoted by the Financial Services Agency.
The bill is expected to be formally submitted to the Diet in 2026, and will also include a ban on insider trading and strengthened obligations to disclose investment information.