Japan Has Legislated 20% Separate Taxation on Crypto Assets, Expected to Apply From 2028

1. The Short Version: Japan Has Legislated Separate Taxation on Crypto, but It Hasn't Started

How certain this information is (as of October 10, 2026 UTC). Confirmed: the Reiwa 8 (FY2026) Tax Reform Outline was approved by the Cabinet on December 26, 2025. The tax reform law was enacted on March 31, 2026. The FIEA amendment law was enacted on July 15, 2026 and promulgated on July 23, 2026. The separate tax rate is 20.315%, with a 3-year loss carryforward, and applies only to specified crypto assets sold through registered domestic operators. Comprehensive taxation stays in place alongside it. Still in process: the effective date of the FIEA amendments, and the start date of separate taxation that follows from it (January 1 of the following year, expected to be January 1, 2028). Not yet clear: the actual list of specified crypto assets, how to calculate the transitional cost basis for coins held before the reform, and how individual income such as staking is handled in detail.

Bottom line: both key laws behind Japan's crypto tax reform (pushed by the Diet, the Ministry of Finance and the Financial Services Agency) have been enacted. But the new system does not apply yet. If you sell now, you are still taxed under the current comprehensive taxation.

The new system applies from January 1 of the year after the Financial Instruments and Exchange Act (金融商品取引法, Japan's law governing securities and other financial products) amendments take effect. Several tax accountant firms expect January 1, 2028. That is an expectation, not a legal date. It depends on a government ordinance (an implementing order issued by Japan's Cabinet).

2. Current System: Why Miscellaneous Income and Comprehensive Taxation Are a Headache

Today, profit from buying and selling crypto assets is generally treated as miscellaneous income (雑所得). It is added to other income such as salary and taxed at progressive rates. This is comprehensive taxation. According to @shimokitapine's summary, the top rate is about 55% (45% income tax plus 10% resident tax).

Under the current system, tax is not triggered only when you convert to yen. According to the same summary, swapping one coin for another, such as Bitcoin for Ethereum, is also taxable. That means you can owe tax before you receive any yen.

According to a note article interpreting the National Tax Agency FAQ (December 2024 revision): under certain conditions, miscellaneous income of 200,000 yen or less may not require a final tax return. Cost basis is calculated by the total average method or the moving average method. Check the original National Tax Agency FAQ for the exact conditions and calculation methods.

Comprehensive taxation will not be abolished after the reform. It will exist alongside the new separate taxation. Trades that do not meet the conditions for separate taxation will still be calculated as described in this section.

3. After the Reform: 20.315% Rate, 3-Year Loss Carryforward and Transitional Rules

Rate breakdown

The separate tax rate is 20.315%: 15% income tax, 5% resident tax and 0.315% special reconstruction income tax. “Self-reported separate taxation” (申告分離課税) means this income is no longer combined with salary and other income. It is taxed separately at a fixed rate, and you report it yourself.

According to @shutten_crypto (who says it comes from the Ministry of Finance's “Explanation of the Reiwa 8 Tax Reform”), starting with the Reiwa 9 tax year (2027), the special reconstruction income tax falls from 2.1% to 1.1% of the income tax amount. At the same time, a new 1% special defense income tax is introduced. Both start together, so the total surtax is unchanged. The combined 20.315% rate is therefore not affected.

Loss carryforward and offsetting

• 3-year carryforward: Losses in the separate-taxation category can be carried forward for 3 years. Materials from 辻・本郷税理士法人, ＦＰ総合研究所 and 泉絢也税理士事務所 all say this.
• Offsetting within the category: According to a summary in 税務QA's special feature, gains and losses within separate taxation can be offset against each other. They cannot be offset against gains and losses from stocks and similar assets.
• 泉絢也 notes that the scope for offsetting and carrying forward crypto asset gains and losses differs from stocks. Check specialist materials and a tax accountant for details.

Conflicting claims on whether the carryforward is settled

Several tax corporation materials say the 3-year loss carryforward is written into the outline and the amendment law. On the other hand, a discussion article from BCCC (the Blockchain Promotion Association, ブロックチェーン推進協会), compiled by @shimokitapine, says the number of carryforward years and whether offsetting is allowed are still undecided, and will be a focus of the 2027 tax reform discussion. The latter claim does not match multiple sources on the enacted law. Readers can check the original sources.

Coins held before the reform

According to 泉絢也税理士事務所 and the 税務QA special feature, crypto assets held before the reform can also qualify for separate taxation, with transitional measures (transitional rules). But the public materials collected for this article do not give specific rules for how the cost basis is calculated in the transition. Those details appear mainly in paid specialist journals, books and seminars. Check specialist materials and a tax accountant.

Specified crypto assets: the list is not public yet

The outline says separate taxation will be introduced “only for crypto assets that contribute to the public's asset formation.” There is currently no public list of which coins count as specified crypto assets. 泉絢也 also raised questions when explaining the outline: whether it is limited to Bitcoin, and whether ADA and others are included. According to @WASABI20150's summary, specified crypto assets will be designated by Cabinet Office ordinance or similar, but this still needs official confirmation.

4. Does My Coin Qualify? Tax Treatment Depends on Where You Sell

The key point of the new system is where you sell, not where you buy. 泉絢也 sums it up this way: buy on a domestic exchange and sell on an overseas exchange or DEX (decentralized exchange), and comprehensive taxation applies. Buy on a DEX and sell on a domestic exchange, and separate taxation applies. Unregistered operators (not registered with the Financial Services Agency) do not qualify.

DeFi, staking, airdrops

According to an article by 泉絢也 published on PROnet, income from DeFi, staking, airdrops and similar sources is still taxed as miscellaneous income under comprehensive taxation. On staking, @Web3_ExpertPro's wording is that it “may” fall under comprehensive taxation, which is vague. The same account also says mining falls under comprehensive taxation, and that lending depends on the details of the transaction.

NFTs

The FSA working group report recommended moving crypto assets under the FIEA, and that scope does not include NFTs or stablecoins. Separate taxation targets specified crypto assets under the FIEA framework, so NFTs are not covered.

A dual structure means you need to sort your records

One person may have both separate-taxation income and comprehensive-taxation income. 泉絢也 says the amended crypto tax system becomes “more complicated overall.” If your records don't show where a given coin was sold or where it was transferred from, it is hard to tell which method to use when you file.

5. Common Misunderstandings, and “Should I Wait for the Reform Before Selling?”

Common misunderstandings

• “The 20% rate has already started this year”: No. It starts on January 1 of the year after the FIEA amendments take effect. That is expected to be 2028, pending a government ordinance.
• “All crypto assets get a flat 20%”: No. 泉絢也 states clearly that separate taxation is an “addition.” Comprehensive taxation remains, creating a dual structure.
• “January 1, 2028 is already set”: @WASABI20150 states flatly that the 20.315% rate applies to sales from January 1, 2028. WEEX and other sources say the start date awaits a government ordinance, with January 2028 as the strong expectation.
• “I don't need to worry about coins in my wallet”: For coins in a self-custody wallet, where you eventually sell them determines the tax treatment. Also, assets in self-custody wallets will fall under a new seizure procedure (see Section 7).
• “The 3-year carryforward isn't settled”: Multiple sources say it is written into law. See Section 3.

Uncertainties you face if you delay selling

Whether to wait for the new system before selling depends on each person's situation. This article gives no advice on that. What can be said is that waiting comes with these uncertainties:

• Start date: January 1, 2028 is an expectation. The exact date awaits a government ordinance.
• Price risk: While you hold, the price may rise or fall.
• Coin scope: Whether your coin counts as a specified crypto asset is unknown. The list is not public.
• Transitional details: The rules for calculating cost basis for coins held before the reform are not yet public.
• Where you sell: Separate taxation applies only to sales through registered domestic operators.

Different statements from the government and the Diet

According to 泉絢也, the government is pushing separate taxation on the grounds that crypto assets are “financial products that contribute to the public's asset formation.” When the Diet passed the bill, it attached a supplementary resolution saying it did not intend to endorse crypto asset investment.

This section is not investment or tax advice. For decisions about when to sell and how to file, consult a tax accountant who knows crypto assets.

6. What You Can Do Now: Trade Records, Cost Basis and Wallet Records

According to the BCCC tax committee discussion (X Space, October 6, 2026) compiled by @shimokitapine, experts say that even with a lower rate, the complexity of calculating gains and losses stays the same or may increase. Reasons include inconsistent CSV formats across exchanges and the difficulty of tracing on-chain transactions. The steps below don't depend on the details of the system. You can do them now.

• Download exchange CSVs regularly: If an exchange shuts down, past data may no longer be available. Keep records from overseas exchanges too.
• List every wallet address you have used: Use a block explorer (a website for viewing public on-chain transactions) to check and save the transaction history.
• Confirm your cost basis: Organize the acquisition date, amount, price and source of each coin. This leaves you evidence for the future transitional calculation.
• Sort by tax treatment: Separate registered domestic operators, overseas exchanges, DEXs, DeFi, staking, airdrops and other sources.
• Consider a crypto gain/loss calculation tool. If you trade a lot or use DeFi, consult a tax accountant.
• Follow official updates: the government ordinance (start date), Cabinet Office ordinances and similar (scope of specified crypto assets), and updates to the National Tax Agency FAQ.

Tax audits are also going digital. According to a post by たまらん坂税理士法人 on October 10, 2026 at 04:18 UTC, tax officials have started using GSS (Government Solution Service) linked with KSK2 (the National Tax Agency's integrated management system) in crypto asset tax audits. This is the firm's own observation.

When organizing records, you don't need to give your seed phrase or private key to anyone, and you shouldn't. Tax authorities, exchanges and wallet vendors will not ask for them through official channels. Anyone who asks for a seed phrase or private key to “file taxes,” “verify assets” or “claim a tax refund” should be treated as a scammer.

7. recoin's View: Under a Dual Tax Structure, Records and Private Keys Matter Equally

Under a dual structure, records are not only for working out amounts. They decide whether a trade is reported under separate or comprehensive taxation, and whether you can file smoothly. If an old wallet won't open or trade records can't be found, you may struggle to explain your cost basis when the old and new systems switch. That can mean extra tax or filing trouble.

Another change is in collection procedures. According to 泉絢也 and たまらん坂税理士法人, the Reiwa 8 amendments also changed collection procedures. Crypto assets in self-custody wallets will become subject to seizure, and the new procedure is expected to start in April 2027. A self-custody wallet is no longer a corner you can leave alone.

We suggest taking stock now: which wallets you have, whether your seed phrases and private keys are stored safely, and whether any old wallets won't open or accounts can't be logged into. The sooner you deal with these, the better.

If your own wallet won't open, for example you forgot the password, wallet.dat won't open, the wallet is on an old computer or hard drive, it has double encryption, or you only remember part of the password, recoin can help with recovery. recoin has on-chain analysis capability, but does not offer fund tracing services to the public, and does not offer tax filing services. For assets stolen by a third party, recovery depends on exchanges, stablecoin issuers and law enforcement.

Disclaimer: This article is based on public information as of October 10, 2026 (UTC). It is not investment, tax or legal advice. It may be updated as new information appears after the government ordinance, Cabinet Office ordinances and National Tax Agency FAQ are published.

FAQ

Sources

• Ministry of Finance: Summary of the Reiwa 8 (FY2026) Tax Reform Outline
• Financial Services Agency: Review of Taxation on Crypto Asset Transactions (Tax Reform Request)
• Financial Services Agency: Financial System Council Working Group on the Crypto Asset Framework, Report
• Financial Services Agency: Bills Submitted to the Diet
• Liberal Democratic Party: Reiwa 8 (FY2026) Tax Reform Outline
• 辻・本郷 税理士法人: Crypto tax becomes 20%! Start date and eligibility for separate taxation
• 税理士法人ＦＰ総合研究所: Changes to crypto asset taxation in the Reiwa 8 Tax Reform Outline and points to watch
• 泉絢也税理士事務所: Crypto asset tax moves to 20% separate taxation
• PROnet: Tax Treatment of Crypto Assets (Tokens) and NFTs [Special Edition, Part 1]
• 税務QA: Special Feature: Taxation of Crypto Assets (Virtual Currency) After the Reiwa 8 Tax Reform
• WEEX: When does the crypto tax reform take effect?
• note: Explanation of the National Tax Agency's “Tax Treatment of Crypto Assets (FAQ)”, December 2024 (Reiwa 6) revision
• @taxlaw17 (泉絢也): The outline says “only crypto assets that contribute to the public's asset formation”
• @taxlaw17 (泉絢也): Separate taxation is decided by “where you sell”
• @taxlaw17 (泉絢也): Route choice and the “exchange” pitfall
• @taxlaw17 (泉絢也): Comprehensive taxation remains, creating a dual structure
• @taxlaw17 (泉絢也): Diet supplementary resolution
• @taxlaw17 (泉絢也): Seizure procedure for self-custody wallets
• @taxlaw17 (泉絢也): The amendments make crypto taxation more complex
• @tamaransaka_tax (たまらん坂税理士法人): Crypto wallets can now be seized
• @tamaransaka_tax (たまらん坂税理士法人): Tax reform bill enacted on March 31
• @tamaransaka_tax (たまらん坂税理士法人): GSS used in tax audits
• @shutten_crypto: Breakdown of 20.315%
• @WASABI20150: FIEA amendments and roadmap
• @shimokitapine: Summary of the BCCC X Space
• @Web3_ExpertPro: Tax category by transaction type

Update log

2026-10-10

First published.

Related articles

• 
  Industry News2026-10-11
  Japan FSA Publishes List of 25 Unregistered Crypto Asset Operators: How to Check and What to Do
• 
  Security Alert2026-10-10
  Nearly $90M Drained from Ledger Users: A Supply Chain Attack Through a Reseller