Digital Garage Group


Apr 17, 2024

Exclusion from Fiscal Year End Market Valuation Taxation for Cryptocurrencies with Transfer Restrictions

Amendments to the Corporation Tax Act and the Cabinet Office Ordinance on Cryptocurrency Exchanges took effect from April 1, 2024. Under these changes, Japanese corporations holding cryptocurrencies may be exempt from end-of-term market valuation taxation under certain conditions.

Requirements for Exemption from Fiscal Year End Market Valuation Taxation:

・Cryptocurrencies with active markets such as BTC or ETH and

・Fall under the category of “cryptocurrencies with specific transfer restrictions,” with the conditions defined below in Article 23, Paragraph 1, Item 9 of the Cabinet Office Ordinance on Virtual Asset Service Providers (“VASPs”), are satisfied in order for the corporation to be allowed to use book value valuation instead of fiscal year end market valuation taxation (as per Article 61, Paragraph 2 of the Corporation Tax Act):

The “cryptocurrencies with specific transfer restrictions” conditions are:
・The holder of the cryptocurrency requests the VASP to impose transfer restrictions on the currency listed in the VASP.
・The holder or the person authorized by the holder notifies the VASP that transfer restrictions have been or will be imposed on the cryptocurrency.

Additionally, information regarding the type, quantity, holder name, purpose of holding, transfer restriction period, and method of transfer restriction, among other relevant details, must be provided to Crypto Garage. The type and quantity of the cryptocurrency must also be published on the Japan Virtual and Crypto Assets Exchange Association (JVCEA) website or disclosed through other appropriate methods.

For more details, please contact us using the inquiry form.

While Crypto Garage will assist customers by filing the necessary notifications to the JVCEA to ensure the customer’s cryptocurrency is listed on the JVCEA website as a “cryptocurrency with specific transfer restrictions,” customers are required to submit a specific notification of the commencement of the book value valuation to the applicable tax office, thus we recommend consulting a tax professional for actual corporate tax payments.