Crypto Tax at 20.315%: Why It Starts on 1 January 2028

The short answer: 20.315% starts on 1 January 2028

Sources: Ministry of Finance, "Commentary on the Fiscal 2026 Tax Reform"[MOF]. The effective date is in Article 1 of the supplementary provisions of the bill[House of Representatives].

"20% from 1 January 2027" is impossible under the law as written. The tax rules apply from 1 January of the year after the year containing the day the act amending the Financial Instruments and Exchange Act takes effect[MOF, amendments to the Act on Special Measures, p.335]. That effective date can only fall inside 2027. So the start does not move from 2028.

Law, not a plan: Art. 38-2 has already been created

Explanations saying "the outline has only set out a direction" are now out of date. What was created is Art. 38-2 (the special rule for separate self-assessment) and Art. 38-3 (the carry-forward of transfer losses). Both were promulgated as Act No. 12 of 2026[MOF commentary, p.89].

Even so, you cannot use it yet. Its entry into force is tied to the Financial Instruments and Exchange Act amendment. Look up the current Act on Special Measures Concerning Taxation in the e-Gov statute database and "specified crypto-assets" does not appear[e-Gov, Act on Special Measures Concerning Taxation]. The cabinet order the Financial Services Agency has promulgated covers only parts such as the tougher penalties, which take effect 20 days later[FSA].

The basic calculation and the filing procedure are in the tax on crypto-assets. This article deals only with when it starts, who it covers and how much it changes.

20.315% covers only what you sell to a registered operator in Japan

The transfers that qualify are limited to a sale entrusted to a crypto-asset trading operator, or a transfer to that operator[MOF, amendments to the Act on Special Measures, p.329]. If the buyer is not a registered operator in Japan, progressive rates still apply after 2028.

If your assets sit on an overseas exchange, it is safer not to plan around a lower rate. The list of coins has not been published either, so you cannot check whether the ones you hold qualify.

For an employee with ¥5 million of taxable income, a ¥3 million gain differs by ¥335,000

Here is what waiting is worth in figures. The model is an employee with ¥5 million of taxable income (before adding the gain), 10% local inhabitant tax and 2.1% special reconstruction income tax.

Note: this is our own calculation, made by applying the National Tax Agency's quick tax table. It is not a published worked example[NTA No.2260]. The per-capita levy and the adjustment credit are ignored, and amounts below one yen are rounded down.

Because the rates are progressive, the gap widens the larger the gain. Conversely, someone with low taxable income and a small gain can end up lighter under aggregate taxation. The difference between the two methods is set out in aggregate versus separate taxation: which is better.

From 2028 it becomes capital gains - but with no special deduction and no halving

From 2028, income from transferring crypto-assets is no longer miscellaneous income but a new category of capital gains[MOF commentary, p.108]. The favourable parts of capital gains treatment, however, are not available.

Sources: Ministry of Finance, "Commentary on the Tax Reform", p.108 and p.329 onward[MOF]. The income category is from the National Tax Agency's Q&A collection[NTA].

It is called capital gains, yet both the ¥500,000 special deduction and the halving for holdings of more than five years are carved out. The design lowers the rate without bringing the reliefs along, and that is the unfavourable side of it.

There is a trap as well. Losses from 2027 and earlier cannot be carried forward. Art. 38-3 covers only losses arising on or after the start date. Cutting a loss now will not offset gains from 2028 onward.

Swapping 1.1% reconstruction tax for 1% defence tax leaves 20.315% unchanged

The 20.315% is made up of 15% income tax plus 2.1% special reconstruction income tax on it, giving 15.315%, plus 5% inhabitant tax. From the 2027 tax year the special reconstruction income tax falls to 1.1%, but a 1% special defence income tax comes in at the same time[NTA No.2260].

The surtaxes still add up to 2.1%, and the National Tax Agency states plainly that the combined rate does not change[NTA No.1331]. You can safely read this as 20.315%, in line with listed shares and futures.

Margin trading (derivatives) also moves to separate taxation in 2028. That one is added not to Art. 38-2 but to Art. 41-14, the special rule for futures trading[MOF outline]. It covers only positions in specified crypto-assets.

Sell in 2027 or wait for 2028? Four things to weigh

Check these in order and the answer appears. There are situations where looking only at the rate and deciding "waiting wins" is the wrong call.

1. Where do you sell? If you only use overseas or decentralised exchanges, waiting does not lower your rate. Decide first whether to move the assets to a registered operator in Japan.
2. How big is the unrealised gain? With ¥5 million of taxable income, the difference is about ¥100,000 on a ¥1 million gain, ¥335,000 on ¥3 million and ¥1.87 million on ¥10 million. At a few hundred thousand yen, price risk is the bigger factor.
3. Are you sitting on losses? An unrealised loss realised during 2027 cannot be carried forward. If the gain and the loss fall in the same year, you can still net them inside miscellaneous income in 2027.
4. Are you selling at all? Simply holding produces no income. Tax arises when you sell, buy goods, or swap for another crypto-asset[NTA Q&A, Q1-1 to Q1-3].

There is one thing to do next. Check which registered Japanese accounts you hold and how big your unrealised gain is, then decide whether to take the gain in the 2027 or the 2028 tax year. The exact date is fixed only when the cabinet order appears, so checking once a year is enough.

Summary

• Separate self-assessment taxation at 20.315% will be available starting January 1, 2028. The underlying tax law was already enacted on March 31, 2026.
• Only sales through registered Japanese exchanges are covered. Sales via overseas exchanges, decentralized exchanges, or peer-to-peer transactions remain under comprehensive taxation.
• Profits through December 31, 2027 are taxed at up to 55.945%. For a salaried worker with ¥5 million in taxable income who earns a ¥3 million profit, the difference is about ¥335,000.
• Even when treated as capital gains, the ¥500,000 special deduction and the one-half reduction do not apply. Losses through the 2027 tax year cannot be carried forward.
• What to check is just two things: where you sell and the size of your unrealized gains.

Reference links (sources)

• MOF, Commentary on the Fiscal 2026 Tax Reform (amendments to the Income Tax Act and others) - the date of enactment and the shift to capital gains
• The same, amendments to the Act on Special Measures Concerning Taxation (income tax) - which transfers qualify, and how the rules apply
• MOF, Outline of the Fiscal 2026 Tax Reform - what makes up the 20%
• House of Representatives, bill to amend the Financial Instruments and Exchange Act and the Payment Services Act - the effective date in Article 1 of the supplementary provisions
• House of Councillors, bill record - the date of promulgation
• FSA, promulgation of the cabinet order - what the order covers
• e-Gov, Act on Special Measures Concerning Taxation - confirming it is not yet in force
• NTA, tax treatment of crypto-assets - income category and timing of taxation (Q2-2, Q1-1 to Q1-3)
• NTA No.1524 - the entry point for the current treatment
• NTA No.2260, income tax rates - the quick tax table and the surtaxes
• NTA No.1331 - the combined rate does not change

Note: the cabinet order on the effective date, the list of coins and the treatment of staking rewards from 2028 are all still open. For an individual decision, ask a tax accountant or your tax office.