How is crypto taxed in Japan?

Japan taxes crypto gains as ordinary income, which makes its crypto tax rate one of the highest among large economies, up to about 55% including local tax. A reform to a flat 20% is planned. As of October 2026 it had not yet taken effect, and it is expected to apply from 2028.

What is the crypto tax rate in Japan?

The National Tax Agency (NTA) says profits from selling or using crypto are, as a rule, miscellaneous income that must be declared on a tax return. If the activity amounts to a business, the profit can be business income instead.

Miscellaneous income is added to other income and taxed at progressive rates. Tax advisers put the top combined rate at about 55.945%, including national income tax, reconstruction surtax and local inhabitant tax.

The NTA's FAQ sets out several points:

• Swaps are taxable. Exchanging one crypto for another counts as disposing of the first one.
• Spending is taxable. Buying goods with crypto is a disposal, measured against the coin's cost.
• Losses are limited. Losses within miscellaneous income cannot be deducted from salary or other income.
• Rewards are income. Crypto received from mining, staking or lending is taxed at its value on the day it is acquired. The guide on whether crypto staking is taxable explains the wider debate.

The NTA accepts either the moving average or the total average method for working out the cost of coins sold.

What is Japan's crypto tax reform?

The tax reform outline for fiscal 2026, drawn up by the governing LDP and Ishin parties, proposed a crypto tax cut. Gains on specified crypto assets would be taxed separately from other income at 20%, made up of 15% national income tax and 5% local tax. Losses could be carried forward for three years.

The change depends on crypto moving under the Financial Instruments and Exchange Act. Parliament passed that law on July 15, 2026, as described in crypto regulation around the world. The new rate is due to apply from January 1 of the year after the amended law takes effect, which projections put at 2028.

Only crypto handled through registered operators would qualify. Other crypto would stay under the current miscellaneous income rules.

How does crypto tax in Japan work for foreigners?

Residency, not nationality, decides what is taxed. The NTA defines three groups:

1. Residents who are not non-permanent residents pay tax on worldwide income.
2. Non-permanent residents, meaning foreign nationals who have lived in Japan for five years or less in the past ten, pay on income other than foreign-source income, plus foreign-source income paid in or sent to Japan.
3. Non-residents pay only on Japan-source income.

So a foreigner who has lived in Japan for several years is generally taxed on crypto gains in the same way as a Japanese citizen. Other countries' approaches are compared in crypto tax around the world.

Rules differ by country and change often. Check the tax authority or a qualified professional for your own situation.