Japan Crypto Tax

Japan Crypto / Digital Assets Tax Skill v1.0

Section 1 — Quick Reference

Quick Reference

Field	Value
Country	Japan (日本)
Tax	Income Tax (所得税) — crypto classified as miscellaneous income (雑所得)
Currency	JPY (Japanese Yen) — all values must be converted to JPY at the transaction date
Tax year	Calendar year (1 January – 31 December)
Primary authority	National Tax Agency (NTA / 国税庁) FAQ on Crypto Assets (暗号資産に関する税務上の取扱いについて(FAQ)); Income Tax Act (所得税法); NTA Individual Return Notice No. 1600
Tax authority	National Tax Agency (国税庁 / NTA)
Filing portal	e-Tax (国税電子申告・納税システム) or paper filing at tax office
Maximum combined rate	55% (45% national income tax + 10% local inhabitant tax)
Reconstruction surtax	2.1% on national income tax (through 2037)
De minimis filing threshold	¥200,000 — salary earners with crypto miscellaneous income below this do not need to file a final return (but local inhabitant tax return is still required)
Cost basis method	Total average method (総平均法, default for individuals) or moving average method (移動平均法) — must notify NTA of choice
Reporting	Kakutei Shinkoku (確定申告) — final tax return
Filing deadline	16 February – 15 March of the following year (for CY 2025: 16 Feb – 15 Mar 2026)
Loss carry-forward	NOT PERMITTED for miscellaneous income
Validated by	Pending — requires sign-off by a Japanese licensed tax accountant (税理士)
Skill version	1.0

Key Principle

Crypto in Japan is classified as miscellaneous income (雑所得 / zatsu shotoku) under aggregate taxation (総合課税 / sōgō kazei). It is NOT classified as capital gains (譲渡所得), which means:

• Progressive income tax rates apply (up to 45% + 10% local = 55%)
• Crypto does NOT benefit from the separate ~20% taxation (分離課税) that applies to stock/securities trading
• Losses cannot be carried forward

Conservative Defaults

Conservative Defaults

Ambiguity	Default
Unknown cost basis	Zero (maximises gain) — STOP if material
Unknown cost basis method	Total average method (総平均法) — the statutory default for individuals
Unknown whether business or miscellaneous income	Miscellaneous income (雑所得) — this is the NTA's default classification
Unknown FMV at receipt	Use Japanese exchange price (bitFlyer, Coincheck) at time of transaction
Multiple income sources besides salary	Aggregate all miscellaneous income; file if total > ¥200,000

Income Classification for Crypto

Income Classification for Crypto

Classification	When it applies	Tax Treatment
Miscellaneous income (雑所得)	Default for individual crypto trading, staking, mining, DeFi	Aggregate taxation at progressive rates
Business income (事業所得)	Only if crypto activity constitutes a "business" (organized, continuous, substantial)	Aggregate taxation; blue return deduction possible; losses offset other income
Employment income (給与所得)	Salary paid in crypto	Subject to withholding; employer obligations

• NTA position (FAQ 2-2) — Crypto gains are principally classified as miscellaneous income (other) unless the activity clearly constitutes a business under established criteria. (NTA FAQ 2-2)

Business vs Miscellaneous Income — NTA Criteria

Business vs Miscellaneous Income — NTA Criteria

Factor	Miscellaneous Income	Business Income
Scale of activity	Personal, occasional	Organised, substantial
Continuity	Intermittent	Continuous, systematic
Infrastructure	Personal devices	Dedicated office, equipment
Livelihood dependency	Side income	Primary source of income
Number of transactions	Moderate	Very high volume

• Conservative default — Unless the taxpayer can clearly demonstrate business-level activity, classify as miscellaneous income.

National Income Tax Rates (2025)

National Income Tax Rates (2025) (Income Tax Act (所得税法) Art. 89; NTA 2025 Individual Income Tax Guide.)

Taxable Income	Rate	Deduction Amount
¥1 – ¥1,950,000	5%	¥0
¥1,950,001 – ¥3,300,000	10%	¥97,500
¥3,300,001 – ¥6,950,000	20%	¥427,500
¥6,950,001 – ¥9,000,000	23%	¥636,000
¥9,000,001 – ¥18,000,000	33%	¥1,536,000
¥18,000,001 – ¥40,000,000	40%	¥2,796,000
Over ¥40,000,000	45%	¥4,796,000

Combined Rates (National + Local Inhabitant Tax)

Combined Rates (National + Local Inhabitant Tax)

Taxable Income	National Rate	Local Rate	Combined
Up to ¥1,950,000	5%	10%	15%
¥1,950,001 – ¥3,300,000	10%	10%	20%
¥3,300,001 – ¥6,950,000	20%	10%	30%
¥6,950,001 – ¥9,000,000	23%	10%	33%
¥9,000,001 – ¥18,000,000	33%	10%	43%
¥18,000,001 – ¥40,000,000	40%	10%	50%
Over ¥40,000,000	45%	10%	55%

• Reconstruction surtax (復興特別所得税) — 2.1% of national income tax, applicable through 2037. This increases the effective national rates slightly (e.g., 45% becomes 45% × 1.021 = 45.945%).

Basic Deduction (基礎控除)

Basic Deduction (基礎控除)

Taxpayer's Total Income	Basic Deduction
Up to ¥24,000,000	¥480,000
¥24,000,001 – ¥24,500,000	¥320,000
¥24,500,001 – ¥25,000,000	¥160,000
Over ¥25,000,000	¥0

Permitted Methods (NTA FAQ 2-4, 2-5)

Permitted Methods (NTA FAQ 2-4, 2-5) (NTA FAQ 2-4, 2-5)

Method	Japanese Name	Description	Default?
Total average method	総平均法 (sō heikin hō)	(Opening balance value + total year acquisitions) ÷ (opening quantity + total year acquisitions quantity) = unit cost for the year	YES — default for individuals
Moving average method	移動平均法 (idō heikin hō)	Recalculate average unit cost each time tokens are acquired; use year-end average	Must notify NTA

• FIFO not available — FIFO is NOT available for individuals in Japan (unlike many other jurisdictions). (NTA FAQ 2-4, 2-5)

Notification Requirement

• To use moving average method, the taxpayer must file a notification (届出書) with the tax office
• The notification must be filed by the filing deadline of the first return that includes crypto income
• Once elected, the method applies to all tokens of the same type
• Changing method requires another notification and approval

Total Average Method — Formula

• Total Average Method formula — Year-end unit cost = (Opening balance value + Sum of all acquisition costs during the year) ÷ (Opening quantity + Total quantity acquired during the year) Transfer cost (譲渡原価) = Units sold during the year × Year-end unit cost (NTA FAQ 2-4, 2-5)

Moving Average Method — Formula

• Moving Average Method formula — At each acquisition: New average unit cost = (Existing holdings value + New acquisition cost) ÷ (Existing quantity + New quantity acquired) Year-end unit cost = Most recent average unit cost as of 31 December Transfer cost = Units sold during the year × Year-end unit cost (NTA FAQ 2-4, 2-5)

What is included in acquisition cost

• Purchase price in JPY
• Exchange commissions and fees
• Transfer fees directly related to acquisition

Source: NTA FAQ 2-3 (暗号資産の必要経費).

Deductible Expenses (必要経費)

Deductible Expenses (必要経費)

Expense	Deductible?
Exchange trading fees on sale	Yes
Internet/smartphone costs (proportional)	Yes, if directly related to crypto activity
Computer/hardware (if > ¥100,000)	Depreciation over useful life
Books, research materials	Yes, if directly related
Tax software subscription	Yes
General living expenses	No

5.1 Mining

5.1 Mining

Aspect	Treatment
Receipt of mined tokens	Miscellaneous income at FMV (JPY) when mined
Cost basis of mined tokens	FMV at receipt (becomes acquisition cost)
Deductible expenses	Electricity, hardware depreciation, cooling, rent (proportional)
Subsequent sale	Gain/loss calculated under total/moving average from FMV cost basis

5.2 Staking

5.2 Staking

Aspect	Treatment
Staking rewards received	Miscellaneous income at FMV when received
Cost basis of reward tokens	FMV at receipt date
Subsequent sale	Gain computed under normal cost basis rules

5.3 Airdrops

5.3 Airdrops

Scenario	Treatment
Airdrop with FMV at receipt	Miscellaneous income at FMV
Airdrop with zero value at receipt	No income on receipt; cost basis = ¥0; full gain on disposal
Airdrop requiring action	Income at FMV when claimed

5.4 DeFi Yield / Lending

5.4 DeFi Yield / Lending

Activity	Treatment
Interest/yield from lending protocols	Miscellaneous income at FMV when received
Liquidity provision (deposit tokens)	May constitute a disposal — exchange of tokens for LP tokens at FMV
LP withdrawal	Disposal of LP tokens; gain/loss computed
Yield farming rewards	Miscellaneous income at FMV when received

5.5 Hard Forks

5.5 Hard Forks

Scenario	Treatment
New tokens from fork	Cost basis = ¥0 (if no acquisition cost); NTA FAQ indicates no income at time of fork if market value is not established
Sale of forked tokens	Full proceeds treated as income

5.6 Crypto-to-Crypto Swaps — CRITICAL

Every crypto-to-crypto swap is a taxable event in Japan. This is one of the most impactful rules.

Crypto-to-Crypto Swaps table (NTA FAQ 1-2 (暗号資産で暗号資産を購入した場合))

Event	Treatment
Swap BTC for ETH	Disposal of BTC at FMV of ETH received; gain = FMV of ETH – cost basis of BTC disposed
Swap ETH for stablecoin	Same — disposal of ETH
Any token exchange	Both sides are taxable events

Section 6 — NFT Treatment

NFT Treatment

Event	Treatment
Purchase of NFT with crypto	Disposal of crypto at FMV; acquisition of NFT at FMV
Purchase of NFT with fiat	Acquisition — record cost
Sale of NFT	Miscellaneous income (gain = proceeds – cost basis)
Creation and primary sale (artist)	Business income or miscellaneous income depending on scale
Royalty on secondary sale	Miscellaneous income
NFT-for-NFT swap	Disposal of both NFTs at FMV
NFT becomes worthless	Loss — cannot carry forward (miscellaneous income limitation)

7.1 Kakutei Shinkoku (確定申告 — Final Tax Return)

Kakutei Shinkoku table

Element	Detail
Form	Kakutei Shinkoku-sho (確定申告書) — B form
Crypto income section	雑所得（その他） — Miscellaneous income (Other)
Computation sheet	NTA Crypto Calculation Sheet (暗号資産の計算書) — total average version available on NTA website
Filing method	e-Tax online or paper at tax office
Filing period	16 February – 15 March of the following year

7.2 The ¥200,000 Threshold

¥200,000 Threshold table

Taxpayer Type	Filing Required?
Salary earner (年末調整 done by employer) with misc. income ≤ ¥200,000	NO national income tax return required
Salary earner with misc. income > ¥200,000	YES — must file Kakutei Shinkoku
Self-employed / business owner	Always required if crypto income exists
Salary > ¥20,000,000	Always required regardless

• Critical note — Even if the ¥200,000 threshold exempts you from national filing, you must still file a local inhabitant tax return (住民税の申告) with your municipality. The ¥200,000 exemption applies ONLY to national income tax.

7.3 NTA Crypto Calculation Tool

The NTA provides a downloadable Excel spreadsheet (暗号資産の計算書（総平均法用）) that automates the total average method calculation:

• Available at: nta.go.jp (Publication → Pamphlets → Individual → Crypto)
• Input: transaction history from each exchange
• Output: total income from crypto for the year
• Japanese exchanges (bitFlyer, Coincheck, GMO Coin) provide annual transaction reports (年間取引報告書) that can be directly input

7.4 Key Deadlines

Key Deadlines table

Deadline	Date (CY 2025 income)
Tax year end	31 December 2025
Filing period opens	16 February 2026
Filing deadline	15 March 2026 (16 March if 15th falls on weekend/holiday)
Payment deadline	15 March 2026 (or extension via bank transfer — 振替納税 in late April)
Local inhabitant tax	Assessed and notified June 2026; paid in 4 installments

7.5 Exchange Reporting

Japanese licensed crypto exchanges (暗号資産交換業者) registered with the Financial Services Agency (FSA / 金融庁) are required to:

• Submit annual transaction reports to the NTA
• Issue annual transaction summaries (年間取引報告書) to users
• Report suspicious transactions

The miscellaneous income limitation

Loss offset table

Rule	Detail	Authority
Loss offset within miscellaneous income	Losses within "other miscellaneous income" (その他の雑所得) CAN offset gains within the same sub-category in the same year	Income Tax Act
Loss offset against other income categories	NOT PERMITTED — miscellaneous income losses cannot offset salary, business, or other income	Income Tax Act Art. 69
Loss carry-forward	NOT PERMITTED for miscellaneous income	Income Tax Act Art. 70
Loss carry-back	NOT PERMITTED	—

Important nuance

Unlike India's regime, Japan does allow offsetting losses within the same miscellaneous income (other) sub-category within the same year. So if you lose ¥1,000,000 on BTC and gain ¥1,500,000 on ETH, your net miscellaneous income is ¥500,000. But if your net miscellaneous income for the year is a loss, that loss cannot offset salary or other income, and cannot be carried forward.

Business income exception

• Business income exception — If crypto activity is classified as business income (事業所得), losses CAN: offset other income in the same year (損益通算); be carried forward for 3 years (with blue return / 青色申告). This is why the business vs miscellaneous income classification matters, but NTA's default is miscellaneous income.

9.1 No Wash Sale Rule

• No Wash Sale Rule — Japan has no specific wash sale rule for crypto. You can sell to crystallise a loss within miscellaneous income and immediately rebuy. However, the limited utility of losses (no carry-forward, no cross-category offset) reduces the incentive.

9.2 Low-Value / Gratuitous Transfer Rule

Low-Value / Gratuitous Transfer Rule table

Provision	Effect
Transfer at below market value	NTA may deem the transfer at FMV; difference may be treated as gift (贈与税)
Gift tax (贈与税)	Gift of crypto valued > ¥1,100,000 (after basic deduction) attracts gift tax at 10%–55%
Inheritance	Crypto included in estate at FMV; inheritance tax applies

9.3 NTA Enforcement

• Japanese exchanges report all user transaction data to the NTA
• The NTA has a dedicated crypto audit team
• Non-filing or underreporting of crypto income carries penalties: 15%–20% additional tax (過少申告加算税) plus interest (延滞税)

Example 1 — BTC Trading, Total Average Method

Input: Japanese tax resident, salary earner (salary ¥6,000,000). CY 2025 crypto activity:

• 1 January: Holds 0.5 BTC (opening balance), cost ¥2,000,000
• 15 March: Buys 1 BTC at ¥8,000,000
• 20 June: Buys 0.5 BTC at ¥9,000,000
• 10 October: Sells 1 BTC at ¥12,000,000
• Exchange fees: ¥30,000 (on sales)

Computation (Total Average Method / 総平均法):

Opening: 0.5 BTC, value ¥2,000,000
Acquired in year: 1.5 BTC, value ¥17,000,000 (¥8,000,000 + ¥9,000,000)

Total: 2 BTC, total cost ¥19,000,000
Year-end unit cost = ¥19,000,000 ÷ 2 = ¥9,500,000 per BTC

Transfer cost for 1 BTC sold = 1 × ¥9,500,000 = ¥9,500,000

Income calculation:
  Proceeds:         ¥12,000,000
  Transfer cost:    ¥9,500,000
  Exchange fees:    ¥30,000
  Net income:       ¥2,470,000

Remaining: 1 BTC, value ¥9,500,000 (carries to next year)

Tax:
  Salary: ¥6,000,000
  Crypto misc. income: ¥2,470,000
  Total income: ¥8,470,000
  (deductions applied, then progressive rates)
  Crypto pushes income into higher bracket.
  Exceeds ¥200,000 threshold → must file Kakutei Shinkoku.

Example 2 — Crypto-to-Crypto Swap

Input: Japanese tax resident. Swaps 2 ETH (cost basis ¥600,000 total via total average) for 0.1 BTC when:

• FMV of 0.1 BTC = ¥1,000,000
• FMV of 2 ETH = ¥1,000,000

Computation:

Disposal of 2 ETH:
  Proceeds (FMV of BTC received):  ¥1,000,000
  Cost basis of 2 ETH:             ¥600,000
  Gain:                             ¥400,000

  This ¥400,000 is miscellaneous income.

Acquisition of 0.1 BTC:
  Cost basis = ¥1,000,000 (FMV at time of swap)
  Added to BTC total average pool.

Example 3 — Mining Income with Expenses

Input: Japanese tax resident. Mined 0.05 BTC over CY 2025. FMV at various receipt dates totals ¥500,000. Electricity costs attributable to mining: ¥80,000. Hardware (¥300,000 PC, 30% crypto use, 4-year depreciation).

Computation:

Mining income (miscellaneous): ¥500,000

Deductible expenses:
  Electricity:                      ¥80,000
  Depreciation: ¥300,000 ÷ 4 × 30% = ¥22,500
  Total expenses:                   ¥102,500

Net mining miscellaneous income:    ¥397,500

Cost basis of mined BTC: ¥500,000 (FMV at receipt)
  For future disposal calculations.

Self-Checks

• Is crypto income classified as miscellaneous income (雑所得) unless business criteria are clearly met?
• Has the correct cost basis method been applied (total average unless moving average notified)?
• Have ALL crypto-to-crypto swaps been identified as taxable events?
• Has the ¥200,000 threshold been checked for salary earners (and local tax filing noted even if below)?
• Are progressive national + 10% local inhabitant tax rates applied (not flat capital gains rates)?
• Is the reconstruction surtax (2.1%) applied on national income tax?
• Have mining/staking expenses been properly identified and prorated?
• Have losses within miscellaneous income been correctly netted within the same sub-category?
• Is the Kakutei Shinkoku filed by 15 March of the following year?
• Are all values converted to JPY at the transaction-date exchange rate?

PROHIBITIONS

• NEVER classify crypto as capital gains (譲渡所得) — it is miscellaneous income (雑所得) for individuals
• NEVER apply the ~20% separate taxation rate for stocks — crypto is under aggregate taxation
• NEVER use FIFO for crypto cost basis — only total average (総平均法) or moving average (移動平均法)
• NEVER ignore crypto-to-crypto swaps — EVERY swap is a taxable event in Japan
• NEVER carry forward miscellaneous income losses to future years
• NEVER offset miscellaneous income losses against salary or other income categories
• NEVER assume the ¥200,000 threshold exempts from local inhabitant tax filing
• NEVER ignore the NTA notification requirement for moving average method election
• NEVER treat transfers between own wallets as disposals
• NEVER present crypto tax positions as definitive — always label as estimated and flag for professional review

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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