Japan2026.11.02NADA News

Crypto Assets Are Tax-Exempt, So Why Does Consumption Tax Rise? How the '5% Inclusion' Rule Cuts Deductions

• Japan's FY2026 (Reiwa 8) tax reform includes a consumption-tax-related change for businesses dealing in crypto assets, alongside the headline move to 20.315% separate taxation on crypto income.
• Crypto-asset transfers are non-taxable under the consumption tax system, but a new rule includes 5% of such transfer amounts when calculating a business's taxable sales ratio.
• This 5% inclusion can shrink the deductible portion of input consumption tax for businesses with crypto transactions, raising their effective consumption tax burden despite crypto's tax-exempt status.