Can corporate cryptoasset "unrealized gains taxation" be avoided? What are the conditions for applying the cost method? [With a list of domestic holdings companies] | CoinDesk JAPAN

The price of Bitcoin is showing an upward trend again, and market interest is increasing.

The lively state of the market not only affects the finances of companies holding cryptoassets, such as Metaplannet and Remixpoint, but it can also be considered an important turning point for companies that are considering entering the market.

However, a major challenge for corporations holding cryptoassets is the taxation on "unrealized gains" due to price increases (taxation based on end-of-term market valuation).

The principle that taxes will be imposed on unrealized gains at the end of the period, even without selling, can put pressure on a company's cash flow. However, recent tax reforms have opened the possibility of avoiding this mark-to-market evaluation under certain conditions and evaluating it using the "cost method."

This article first presents a list of domestic companies holding cryptoassets, and then organizes the basics of this tax system along with expert explanations on the points of applying the cost method.

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> > 1. Metaplanet > > > * ・Business: Hotel operations, Bitcoin investment > * ・Total Purchase Amount: 62.165 billion yen > * ・Holdings: 4855BTC > * ・Overview: Advocating a "Bitcoin-only" strategy, raising funds through the issuance of stocks and corporate bonds. Ranked 10th among the world's companies holding Bitcoin. > > > > 2. Nexon > > > * ・Business: Game Development > * ・Total Purchase Amount: 11 billion yen > * ・Holdings: 1717BTC > * ・Overview: Purchased in April 2021. The average purchase price is $58,226 per BTC. > > > > 3. Remixpoint > > > * ・Business: Energy, Medical > * ・Total Purchase Amount: Resolution to purchase a total of 10 billion yen (including altcoins) > * ・Holdings: 615.99821175BTC > * ・Overview: Holdings of altcoins such as Ethereum (ETH), Solana (SOL), and XRP. > > > > 4. gumi > > > * ・Business: Mobile game development > * ・Total Purchase Amount: Announced the purchase of BTC worth 1 billion yen in February 2025. > * Overview: Expanding efforts in cryptoassets, including implementing Bitcoin benefits worth a total of 16 million yen for shareholders. > > > > 5. SBC Medical Group Holdings > > > * ・Business: Beauty, Medical > * ・Total Purchase Amount: 60 million yen > * ・Holdings： 5BTC > * ・Overview: Originating from Shonan Beauty Clinic. Announced a purchase of Bitcoin worth 1 billion yen. > > > > 6. AI Fusion Capital Group > > > * ・Business: Securities, commodity futures trading > * ・Total Purchase Amount: 300 million yen > * ・Holdings: 24.63449278BTC > * ・Overview: Resolution to purchase 500 million yen worth of Bitcoin on March 11, 2025. > > > > 7.GFA Capital > > > * ・Business: Investment/Fund Management > * ・Total Purchase Amount: Announced a purchase with a limit of 300 million yen > * ・Overview: There is also a move to realize profits through short position settlement. > > > > 8. Value Creation > > > * ・Business: Marketing, Real Estate DX > * ・Total Purchase Amount: 200 million yen > * Overview: A resolution has been made to purchase an additional 100 million yen by August 2025. > > > > 9.ANAP Holdings > > > * ・Business: Apparel Retail > * ・Total Purchase Amount: 200 million yen > * ・Holdings: 16.6591BTC > * ・Overview: Established ANAP Lightning Capital as a consolidated subsidiary in February 2025 and commenced investment operations. > > > > 10.enish > > > * ・Business: Mobile game development > * ・Total Purchase Amount: 100 million yen > * ・Overview: Providing the blockchain game "De: Lithe Last Memories." > > > > 11. S-Science > > > * ・Business: Metal Processing > * ・Total Purchase Amount: Expected to start investment business from July 2025 > * ・Overview: A long-established company founded in 1946 that engages in the sale of nickel products and real estate business. > > > > [Note] > > > * This list is compiled based on official announcements by companies, according to a survey by CoinDesk JAPAN (as of April 23, 2025). > * ・For this reason, it does not cover all Bitcoin purchasing companies or cases, including unpublished cases. > * ・The figures mentioned include reference values based on information and exchange rates at the time of publication. > > >

What are the requirements for applying the cost method?

As the movement for companies to hold cryptoassets accelerates in Japan, one of the challenges many companies face is the valuation method at the end of the term under corporate tax law.

As indicated in the materials published by the National Tax Agency (see the figure below), in principle, cryptoassets (those with an active market) held by corporations are valued at "fair market value" at the end of the period, and the gains and losses from that valuation are included in taxable income (Corporate Tax Act Article 61).

JCBA (Japan Cryptoassets Business Association) Taxation Committee Vice Chair Takegahara explained this principled treatment as follows.

"Under the tax law before the amendment, cryptoassets were seen more as a currency, referred to as 'virtual currency.' Similar to how foreign currencies like dollars and euros are evaluated at the end-of-period rate, and unrealized gains are subject to taxation, this arrangement was also applied to cryptoassets. In other words, if the value of Bitcoin and other holdings at the end of the period has increased compared to the purchase price, that difference is counted as profit under corporate tax law; this is the basic idea of 'mark-to-market taxation.'"

This market valuation taxation has the aspect that it allows for the recognition of evaluation losses when prices decline; however, for companies that hold cryptoassets based on long-term strategies, there has been the challenge of needing to pay taxes on unrealized gains that do not come with cash flow.

Mr. Takegahara stated, "It's not necessarily the case that mark-to-market taxation is bad. In a scenario where prices are falling, losses can be recorded, and ultimately, if sold, the total tax burden will theoretically be the same under either valuation method. However, when assuming long-term holdings, in a scenario where prices continue to rise, a tax burden will continue to arise even though no sale has taken place."

Against this background, due to the tax reforms for Fiscal Year 2023 and Fiscal Year 2024, if certain conditions are met, it will be exempt from end-of-term market valuation, allowing for the application of the "cost method" (a method of valuation at the acquisition price). This does not apply to all cryptoassets but is limited to cryptoassets under specific conditions.

First, for "cryptoassets with no active market," that is, those not listed on exchanges and without an objective market price, the cost method will continue to be applied as before.

As an important revision, even for cryptoassets with an active market, it has become possible to choose the cost method for year-end evaluation if certain requirements are met in the following cases.

> > ・Specific Self-Issued cryptoassets: Among the cryptoassets issued by the issuing company itself, those that have been continuously Holdings since issuance and meet certain requirements such as transfer restrictions (lock-up, etc.) for a certain period. > > > According to Mr. Takegahara, "This particularly addresses the challenges faced by projects issuing their own tokens. Even if the issued tokens have a market price, the issuer cannot immediately sell all of their holdings. Nevertheless, being taxed on the market valuation poses a problem for business continuity, which was the background of the amendment." This was addressed in the 2023 tax reform. > > > ・Cryptoassets with Transfer Restrictions: Even if the cryptoassets (such as Bitcoin) are acquired from a third party, if certain measures, such as "technical measures" or equivalent measures, are taken to prevent transfer for a certain period (the JVCEA's self-regulatory rules generally stipulate more than one year), and this has been confirmed and announced. In this case, corporations can choose to evaluate either the market value method or the cost method (Corporate Tax Act Article 61, Paragraph 2, Item 2). > > > Regarding this "technical measure," Mr. Takegahara explained specific methods such as "measures to prevent the holders themselves from transferring by using lock-up codes, as well as requesting transfer restrictions from cryptoasset exchanges (such as Coincheck's 'Asset Lock' service), utilizing trusts, or methods to prevent transfers by keeping part of the keys externally with multi-signature, among others." > > >

In order for a company to apply this cost method valuation, it is not enough to simply claim "not to sell"; it is necessary to create a state where the transfer is objectively restricted and to prove it.

Mr. Takegahara added, "In order for the tax authorities to make objective judgments, a process has been established through organizations such as JVCEA to confirm and announce that technical measures are being taken, or that requests for transfer restrictions to exchanges are being made." This was addressed in the tax reform for the fiscal year 2024.

Therefore, if a corporation currently holds cryptoassets in an active market, the following arrangement applies for the year-end valuation.

> > ・Principle: Market value taxation. Evaluate at market value at the end of the period and record valuation gains and losses (see above diagram [after amendment] ①). > > > ・Exceptions (Cost method applicable): > ・Specific self-issued cryptoassets (with requirements, above figure [after revision] ③). > ・Cryptoassets with specific transfer restrictions (requirements apply. Transfer restrictions of more than one year are common. Either the market value method or the cost method can be chosen, see the above diagram [after revision] ②). > > > >

Companies should understand these tax systems, taking into account their own cryptoasset holdings strategy (whether for short-term trading purposes or long-term asset holding purposes) and cash flow situation. It is important to consider procedures for applying the cost method if necessary (such as implementing transfer restriction measures and notifying the tax office, as well as notifying JVCEA).

Mr. Takegahara pointed out that "companies are required to choose the optimal tax treatment according to their own circumstances."