CoinPost: Japan's tax reform is considering adopting a separate taxation system for virtual currencies, supporting a 3-year loss carryforward deduction.

Foresight News reported, according to CoinPost, that on December 19, Japan's Liberal Democratic Party and Japan Innovation Party released the 2026 fiscal year tax reform outline, proposing a new direction for virtual currency taxation. The outline also addressed the previously requested separate taxation system by many investors, indicating that future tax policies may change. The outline states that the direction is to classify virtual currencies as financial products that help the public accumulate assets, rather than simply labeling them as "speculative" products. Consideration is being given to applying the same separate taxation system to virtual currency income as is applied to stocks and investment trusts.

In response, CoinPost summarized the key points regarding virtual currency in the tax reform outline: The outline lists "spot trading," "derivatives trading," and "ETF" of virtual currencies as subjects for separate taxation, but does not explicitly mention reward-based transactions from holding virtual currencies, such as staking and lending. The outline stipulates that virtual currency trading businesses are subject to separate taxation and reporting systems, with the premise being "transactions of specific virtual assets." It is currently unclear how broad or narrow the scope of "specific crypto assets" will be. Virtual currency income may be classified as "capital gains" or "other income." The current tax reform plan does not explicitly mention NFT, so profits from NFT trading may still need to be declared as miscellaneous income and subject to comprehensive taxation. Financial products investing in virtual currencies (such as investment trusts and ETFs) are also included. The tax reform plan summary states that losses from virtual currency trading can be carried forward for three years. For virtual currencies, "capital gains from spot trading" and "profits and losses from derivatives trading (futures, margin trading, etc.)" must be taxed separately and may be classified as different categories of income. In the future, profits realized from virtual currencies may be subject to taxation when transferred overseas.