The Act amending the Financial Instruments and Exchange Act (FIEA) and the Payment Services Act, which moves crypto assets under the FIEA, passed the Diet on 15 July 2026. Separately, the income tax amendments enacted on 31 March 2026 introduce 20% separate taxation on crypto-asset income, expected to apply after the amended FIEA takes effect (1 January 2028 at the earliest).
Based on the laws and explanatory materials published as of 11 September 2026, this column organises the key points of the reform, the transactions expected to qualify for separate taxation, the timeline to enforcement, and what users of overseas exchanges can prepare now. Enforcement dates, eligible assets and detailed requirements will be set by cabinet and ministerial orders, so confirmed items are separated from expectations.
Crypto assets move under the FIEA: the amendment passed on 15 July 2026
Until now crypto assets have been regulated under the Payment Services Act as a means of payment, with the registration system for crypto-asset exchange service providers sitting in that law. Recognising that crypto assets are widely treated as investments, the amendment shifts the centre of regulation to the FIEA and positions crypto assets as "financial instruments" distinct from securities.
| Item | Content |
|---|---|
| Legal position of crypto assets | Moved from the Payment Services Act to the FIEA; regulated as financial instruments distinct from securities |
| Regulation of operators | "Crypto-asset exchange business" renamed "crypto-asset trading business" and integrated into the FIEA; investment management, advice and crypto-asset borrowing added to regulated business |
| Disclosure | Crypto assets divided into "specified crypto assets" and others; disclosure required at new offerings plus extraordinary and periodic (annual) disclosure |
| Unfair trading | Insider trading rules introduced for crypto assets (covering assets handled by registered domestic crypto-asset trading business operators); investigative powers of the Securities and Exchange Surveillance Commission and surcharge framework put in place |
| Enforcement | Takes effect on a date set by cabinet order within one year of promulgation, with transitional measures allowing existing operators to continue while their registration is pending; media reports expect enforcement during 2027 |
※ Sources: FSA explanatory material on the bill (April 2026, which shows enforcement within one year of promulgation) and law-firm commentaries, checked on 11 September 2026. The enforcement date and details will be fixed by cabinet and ministerial orders.
For residents of Japan, the direct changes are that regulation of registered domestic operators rises to a level comparable to Type I financial instruments business operators, and that insider trading rules extend to crypto assets. The amendment does not directly regulate overseas exchanges, but the framework of warnings and enforcement against operators serving residents of Japan without registration continues under the FIEA.
When does Japan's 20% crypto tax start? Expected rate and scope
Currently, an individual's gains from crypto-asset trading are classified as miscellaneous income under comprehensive taxation: combined with salary and other income, they are taxed at 5% to 45% income tax plus 10% resident tax (up to about 55%), and losses cannot be carried forward. The income tax amendments enacted on 31 March 2026 are expected to change this as follows.
| Item | After the reform (expected) | Current |
|---|---|---|
| Rate | 15% income tax + 5% resident tax = 20% (excluding the special reconstruction income tax) | Comprehensive taxation, up to about 55% |
| Scope | Income from spot trading, derivatives and ETFs (investment trusts) of "specified crypto assets" | All crypto assets (miscellaneous income) |
| Loss carry-forward | Three years | Not allowed |
| Offsetting | Spot trades in specified crypto assets can be offset against each other; not between spot and derivatives, nor against stocks and other financial instruments | Within miscellaneous income only |
| Start | From 1 January of the year after the amended FIEA takes effect (1 January 2028 at the earliest) | — |
※ Sources: Daiwa Institute of Research report (6 February 2026) and the National Tax Agency's page on current treatment. The scope of "specified crypto assets" will be fixed by ministerial order, so not every asset traded in Japan will necessarily qualify.
Separate taxation covers income from trades in assets that qualify as specified crypto assets from 1 January of the year after the amended FIEA takes effect. Trades before then, and trades in assets outside the scope, remain miscellaneous income under comprehensive taxation. Prepare your 2026 and 2027 tax returns on the current rules.
How overseas exchange profits are taxed: what changes and what is not yet decided
For people trading on overseas exchanges, here is what can and cannot be said as of September 2026.
What can be said now
- Profits made on overseas exchanges must be declared in Japan as long as you are a resident of Japan; this does not change with the reform
- Separate taxation is expected to be limited to trades in specified crypto assets, whose criteria are yet to be set; whether assets listed only on overseas exchanges qualify is undecided
- You must keep your own records of acquisition cost, sale proceeds and fees; overseas exchanges often do not issue the annual transaction reports that registered domestic operators provide
- 1 January of the year after enforcement is expected to be the cut-off, so organise your trading history by year with unrealised positions in mind
What is not yet decided
- The enforcement date of the amended FIEA (set by cabinet order) and the linked start date of separate taxation
- The range of assets included in specified crypto assets and how they are determined
- The conditions under which trades on overseas exchanges qualify for separate taxation (treatment of trades not made through a registered domestic operator)
- Detailed classification of derivatives (perpetual futures and leveraged trading) and the scope of statutory reporting
- Download and keep your overseas exchange history (spot, futures, deposits, withdrawals, fees) as CSV files, organised by year
- Prepare your 2026 return under the current rules (miscellaneous income, comprehensive taxation). Salaried employees must file an income tax return when non-salary income exceeds JPY 200,000 a year (resident tax is declared separately)
- Once the enforcement date and eligible assets are published by cabinet and ministerial orders, confirm them on the NTA and FSA websites
Tax basics for profits made on overseas exchanges (beginner guide) →
Frequently asked questions
Q. When will Japan's 20% separate taxation on crypto assets apply?
A. It is expected to apply from 1 January of the year after the amended Financial Instruments and Exchange Act takes effect, which would be 1 January 2028 at the earliest. The amended FIEA passed on 15 July 2026, but its enforcement date is set by cabinet order and was not fixed as of 11 September 2026.
Q. Will profits from overseas exchanges qualify for separate taxation?
A. Undecided. Separate taxation is expected to be limited to trades in "specified crypto assets", whose scope will be set by ministerial order. The conditions for overseas exchange trades have not been published, so keep records on the assumption that current miscellaneous-income rules apply.
Q. What does the amended FIEA change for crypto assets?
A. Crypto-asset regulation moves from the Payment Services Act to the FIEA, and crypto assets are treated as financial instruments distinct from securities. Crypto-asset exchange business is renamed crypto-asset trading business, investment management and advice become regulated, and insider trading rules are introduced for crypto assets.
Q. Can losses be carried forward under separate taxation?
A. Losses from trades in specified crypto assets are expected to be carried forward for three years. However, offsetting between spot and derivatives, or against stocks and other financial instruments, is not expected to be allowed.
Q. How should I file my 2026 return?
A. Under the current rules. Gains from crypto-asset trading are declared as miscellaneous income under comprehensive taxation. Salaried employees with non-salary income above JPY 200,000 a year must file an income tax return, and resident tax must be declared separately. Consult the tax office or a tax accountant for specific calculations.
Sources
- FSA | Explanatory material on the bill amending the FIEA and the Payment Services Act (April 2026, PDF, Japanese) →
- National Tax Agency (Japan) | Tax treatment of crypto assets (Japanese) →
- Daiwa Institute of Research | 20% separate taxation for crypto-asset transactions (6 February 2026, Japanese) →
- Financial Services Agency (Japan) | Crypto assets: registered operators, warnings to unregistered operators →
FX Textbook is an independent information site, not an exchange or a provider of personal investment advice. Crypto-asset trading involves risk: price volatility, liquidation of leveraged positions, transfer mistakes and the operational risk of exchanges and service providers can cause you to lose some or all of your invested capital. No result is guaranteed.
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