If you make a profit on crypto assets (cryptocurrency) such as Bitcoin, tax applies. For the 2027 tax year and earlier, crypto asset profits are taxed as "miscellaneous income" under aggregate taxation, with progressive tax rates applied on the total after combining them with other income such as salary (up to about 55% including residence tax). A key point to note is that this treatment differs greatly from stocks (separate taxation of about 20%). On the other hand, separate self-assessment taxation at 20.315% has already been enacted by the reform act passed in March 2026, and it applies from January 1, 2028 (the Reiwa 10 tax year). This article organizes, in a neutral way, the taxation mechanism under the current rules, the timing at which profits arise, the calculation method, and what changes in 2028.
The current rule: miscellaneous income, aggregate taxation
Crypto asset profits are, in principle, classified as miscellaneous income and are subject to income tax and residence tax after being combined with salary income, business income, and the like. Because it is excess progressive taxation, where the tax rate rises as income grows, combining income tax (5–45%) and residence tax (about 10%) can reach a maximum of about 55%.
The classification changes with the size of the revenue and with your books. If your revenue from crypto asset transactions for the year exceeds ¥3 million, it is in principle business income if you keep books and records for those transactions, and miscellaneous income (business-related miscellaneous income) if you do not[National Tax Agency FAQ 2-2 (in Japanese)]. Either way it is aggregate taxation, and the progressive rates are the same.
Profits on listed stocks and FX are subject to separate self-assessment taxation of about 20% (20.315%), but crypto assets are under aggregate taxation, so the higher your income, the higher the tax rate. Also, crypto asset losses cannot be offset against other income such as salary, nor carried over to the following year (for the 2027 tax year and earlier).
The "timing" at which tax applies
It is often assumed that "tax applies only when you convert to Japanese yen," but profits are realized in other situations too. Tax applies in the following situations.
① When you sell crypto assets and convert them to Japanese yen
② When you buy goods or services with crypto assets (calculated at the market value at settlement)
③ When you buy (exchange for) another crypto asset using one crypto asset
④ When you acquire crypto assets through mining, staking, lending, and the like
Merely buying and holding (a state of unrealized gains) is not taxed. Income arises only at the point the profit is realized, such as through a sale, exchange, or use.
How to calculate the profit
If you bought the same crypto asset over several purchases, the acquisition cost is calculated using the total average method (the default if you have not filed a notification) or the moving average method[National Tax Agency No.1524 (in Japanese)].
This ¥2 million is added on top of other income such as salary, and is taxed at the progressive rate corresponding to the total taxable income.
A salaried person must file a tax return if their income other than salary, including crypto assets, exceeds ¥200,000 for the year (even at ¥200,000 or less, a residence tax declaration may still be required). Download and keep your transaction history from the exchange.
Separate taxation at 20.315% is already law, and applies from January 1, 2028
Separate self-assessment taxation is no longer a "policy direction." Article 38-2 of the Act on Special Measures Concerning Taxation (separate self-assessment taxation at 20.315%) and Article 38-3 (three-year carryover of losses) were created by the Act Partially Amending the Income Tax Act and Others (Act No. 12 of Reiwa 8), passed and promulgated on March 31, 2026[Ministry of Finance, Explanation of the reform (in Japanese)]. What changes is not only the rate but also the income classification.
The start date is defined as January 1 of the year following the year in which the amending act for the Financial Instruments and Exchange Act and others (Act No. 64 of Reiwa 8, promulgated on July 23, 2026) comes into force. That enforcement date will be designated by cabinet order somewhere between April 1 and July 22, 2027. Separate taxation therefore starts on January 1, 2028, and profits realized up to December 31, 2027 remain miscellaneous income under aggregate taxation. As of September 2026 the cabinet order setting the enforcement date has not yet been promulgated, but the year in which the tax changes — 2028 — will not move.
① The 20.315% rate applies only to sales to registered domestic operators (crypto asset trading operators). Profits from overseas exchanges, decentralized exchanges (DEX) and person-to-person sales stay under aggregate taxation at progressive rates even after 2028.
② From 2028 the income becomes a new category of capital gains rather than miscellaneous income. However, the ¥500,000 special deduction, the halving for assets held more than five years, and offsetting against other income are all unavailable.
③ Losses from before the reform cannot be carried over. The three-year carryover covers only losses from transfers made on or after January 1, 2028; losses for the 2027 tax year and earlier simply disappear.
| Item | 2027 tax year and earlier | From the 2028 tax year |
|---|---|---|
| Income classification | Miscellaneous income in principle (business income if revenue exceeds ¥3 million and books are kept) | A new category of capital gains |
| Method and rate | Aggregate taxation, progressive (up to about 55% including residence tax) | Transfers to registered operators: separate taxation at 20.315%; everything else: aggregate taxation |
| ¥500,000 special deduction / halving after five years | Not relevant (miscellaneous income) | Neither applies |
| Offsetting against other income | Not possible | Not possible |
| Carryover of losses | Not possible | Three years, against other specified crypto assets only (you must file a return every year from the year of the loss) |
For when it starts and how much changes, see when crypto tax becomes 20% and how much it changes, which compares the tax by amount of profit.
FAQ
How much is crypto asset tax now? Is it 20% like stocks?
No. For the 2027 tax year and earlier it is miscellaneous income under aggregate taxation, with progressive rates on the total combined with salary and the like (up to about 55% including residence tax). Separate taxation at 20.315% has already been enacted, but it applies only to transfers made on or after January 1, 2028 — and only to what you sell to registered domestic operators.
Is there no tax if I don't convert to Japanese yen?
Even without converting, profits are realized and become taxable through purchases made with crypto assets, exchanges for another crypto asset, the acquisition of mining rewards, and the like. If you are merely holding, it is not taxed.
Do employees need to file a tax return too?
A tax return is required if your income other than salary (including crypto asset profits) exceeds ¥200,000 for the year. Even at ¥200,000 or less, a residence tax declaration may be required.
Can crypto asset losses be offset against other income?
Offsetting against other income remains impossible after 2028 as well. The carryover covers only losses arising from sales to registered domestic operators on or after January 1, 2028; if you file a return every year from the year of the loss, you can carry it forward for three years. Losses for the 2027 tax year and earlier cannot be carried over.
Summary
Reference links (sources)
This article is based on the following published materials (neutral, primary sources). Because the tax system is revised, please confirm the latest content before filing.
- National Tax Agency No.1524 Taxation where a profit arises from using crypto assets (in Japanese)
- National Tax Agency On the tax treatment of crypto assets and the like (FAQ) (in Japanese)
- Ministry of Finance FY2026 (Reiwa 8) Tax Reform Outline (in Japanese)
- Ministry of Finance Explanation of the FY2026 Tax Reform (amendments to the Act on Special Measures Concerning Taxation, income tax) (in Japanese)
* This article is general information, not tax advice. For individual decisions, please confirm with a tax office or a tax accountant.
