NFTs in Japan
Whether NFTs are legal, when an NFT can still be regulated, and how the National Tax Agency taxes NFT income.
This is general information, not legal, tax, or financial advice. Verify the current rules with a qualified local professional and the official regulator before acting.
NFTs are legal in Japan as of March 2026. The Financial Services Agency (FSA) has said that NFTs are in principle not crypto assets under the Payment Services Act, since most have no function as a means of payment, so they sit outside the main crypto exchange regime. Income from NFTs is still taxable, generally as miscellaneous income, administered by the National Tax Agency (NTA). This is not tax or investment advice.
Are NFTs legal in Japan
Yes. As of March 2026 buying, selling, and creating NFTs is legal in Japan. The key regulatory point is classification. The Financial Services Agency (FSA) has indicated that NFTs, which generally have no economic function as a means of payment because each token is unique, are in principle not treated as crypto assets under the Payment Services Act. The reform that is moving ordinary crypto assets toward the Financial Instruments and Exchange Act is not, as of March 2026, intended to sweep in typical NFTs.
That classification matters because it changes who regulates the activity. A marketplace that only lists collectible or art NFTs is generally not running a crypto asset exchange service, so it does not need FSA registration in the way a bitcoin exchange does. The flip side is that the consumer protections of the exchange regime may not apply, so the usual care about counterparties, custody, and fraud is on the buyer.
When an NFT can still be regulated
The not a crypto asset position is about typical NFTs, not all of them. An NFT that is structured to work as a means of payment, that is divided into fungible interchangeable units, or that gives rights to profit or revenue can fall under the Payment Services Act as a crypto asset or under the Financial Instruments and Exchange Act as a security, each overseen by the FSA. As of March 2026 the test is the token's actual function, not the NFT label. A play to earn or finance style token deserves a closer look than a one of one artwork.
Tax on NFTs
The National Tax Agency (NTA) taxes the economic result of NFT activity even though most NFTs are outside the crypto asset definition. For an individual, profit from selling an NFT is generally miscellaneous income, taxed at progressive rates with a combined marginal rate that can reach roughly 55 percent as of March 2026. A creator earning primary sales or royalties may instead have business income depending on scale. Because buying an NFT often means first disposing of crypto to pay for it, that disposal can itself be a separate taxable event. As of March 2026 the proposed flat 20 percent crypto rate does not cover NFT income. Keep dated records. This is information, not tax advice. See the Japan tax page.
Regulator and sources
- Financial Services Agency (FSA), guidance that tokens without a payment function, including typical NFTs, are not crypto assets under the Payment Services Act.
- Financial Services Agency (FSA) and the Japan Virtual and Crypto Assets Exchange Association (JVCEA), classification of tokens handled by registered providers.
- National Tax Agency (NTA), guidance on the tax treatment of crypto asset and NFT transactions.
Sources are named for reference. Always confirm the current position directly with the named regulator or authority before acting.
Frequently asked questions
Are NFTs legal in Japan?+
Yes. As of March 2026 buying, selling, and creating NFTs is legal. The FSA treats typical NFTs as not crypto assets under the Payment Services Act, so they sit outside the main exchange regime.
Do NFT marketplaces need an FSA licence in Japan?+
A marketplace listing only collectible or art NFTs generally is not a crypto asset exchange and does not need that registration. A platform handling tokens that function as payment or securities can be regulated.
How are NFTs taxed in Japan?+
Profit is generally miscellaneous income for individuals, or business income for active creators, taxed at progressive rates. Paying for an NFT with crypto can also trigger a taxable disposal. The NTA administers this. This is not tax advice.
Can an NFT be regulated as a crypto asset in Japan?+
Yes, if it functions as a means of payment, is divided into fungible units, or grants profit rights. Then it can fall under the Payment Services Act or the Financial Instruments and Exchange Act. The test is function, not the label.
Does the flat 20 percent tax apply to NFTs?+
No. As of March 2026 the proposed flat rate covers specified crypto assets traded on registered platforms, not NFT income, which stays in the higher progressive band.
Rules change. The classification of NFTs depends on how each token actually functions, and Japan's wider crypto framework is changing. Confirm the current position with the FSA, the NTA, and a qualified professional before acting.