JAPAN Law and Practice Contributed by: Keisuke Hatano, Takeshi Nagase, Takato Fuki and Tomoaki Katayama, Anderson Mori & Tomotsune
fore possible to provide financial services, such as loans, using the right to demand the return of crypto- assets as collateral. 1.2.2 Access to Banking There are no statutory restrictions in Japan that pre- vent firms providing crypto-asset services from obtain- ing general banking or payment services. In practice, however, given the money laundering (ML) and terror- ist financing (TF) risks associated with crypto-assets, unless such firms hold a registration as a CAESP, etc, they may face practical difficulties or significant delays in opening bank accounts and there have indeed been such cases. 1.2.3 ESG/Sustainable Finance There does not appear to be any ESG/sustainable finance requirements that specifically apply to digital assets in Japan. 1.2.4 Tax One of the most important issues in Japanese taxa- tion of crypto-assets was the treatment of consump- tion tax. Before June 2017, the sale of crypto-assets was subject to consumption tax if the transferor’s office was located in Japan. However, following tax reforms in 2017, transfers of crypto-assets conducted in Japan from July of that year onwards are no longer subject to consumption tax. However, it is important to note that the consumption tax is still applicable to compensation received in relation to the lending of crypto-assets. With respect to individual income tax, the National Tax Agency of Japan treats gains realised from the sale or use of crypto-assets as “miscellaneous income” ( zatsu - shotoku ) and considers that taxpayers will not be permitted to utilise losses elsewhere to offset gains realised from the sale or use of “crypto-assets.” Fur- thermore, inheritance tax will be imposed on “crypto- assets” included in a deceased person’s estate. For corporate tax purposes, corporations must per- form market value assessments of crypto-assets with an active market at the end of each fiscal year and record any difference between book value and market value as profit or loss. This end-of-period market valu-
ation taxation poses a significant barrier for Japanese companies looking to enter the Web3 space. However, the 2023 tax reform stipulates that end- of-period market valuation taxation does not apply if certain conditions are met, such as continuous own- ership since issuance and compliance with transfer restrictions, for crypto-assets issued by the corpora- tion itself at the end of the fiscal year. Additionally, the 2024 tax reform allows for exemp- tion from end-of-period market valuation taxation for non-self-issued crypto-assets held by a corporation at the end of the fiscal year, provided they meet certain conditions, such as compliance with certain transfer restrictions. Further, alongside the amendments to the crypto- assets legislation, a major overhaul of individual income tax rules pertaining to crypto-assets transac- tions is planned. An outline of the financial year 2026 tax reform (approved by the Cabinet on 26 Decem- ber 2025) stipulates that for the transfer of “speci- fied crypto-assets” (ie, crypto-assets registered in the registry of crypto-asset service providers subject to regulation under the Amendment Bill of the FIEA), a three-year loss carry-forward will be permitted when the transaction is conducted through such a provider. This provision also applies to crypto-asset derivative transactions and beneficial interests in investment trusts that hold specified crypto-assets (ie, crypto- asset exchange-traded funds (ETFs)). The “Act for Partial Revision of the Income Tax Act, etc”, imple- menting these provisions was enacted on 31 March 2026; however, its effective date is contingent on the enactment of the parallel amendment to the FIEA, which was submitted to the Diet on 10 April 2026. 1.2.5 Insolvency A separate special liquidation framework is applicable to CAESPs and EPIESPs. CAESPs and EPIESPs are therefore subject to general insolvency laws, such as bankruptcy laws. However, in terms of the right of cus- tomers to claim the return of “crypto-assets” depos- ited with a CAESP, the amended PSA states that a preferential right exists in relation to “crypto-assets” that the CAESP has segregated for its customers.
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