Statutory definition

“Article 119-6 (Acquisition Cost of Crypto-Assets): Unless otherwise provided, the acquisition cost underlying valuation under Article 119-2, paragraph 1 (Methods of Valuing Crypto-Assets) shall be the amount specified for each category: 1. Purchased crypto-assets: purchase consideration plus purchase commissions and other acquisition expenses, if any. 2. Crypto-assets acquired through self-issuance: issuance expenses. 3. Crypto-assets other than the preceding two categories: the value ordinarily required to acquire them at the time of acquisition.”

“2. Acquisition cost under the preceding paragraph shall be: 1. For crypto-assets acquired by gift, inheritance, or bequest, excluding gifts or bequests under Article 40, paragraph 1, item 1 (Inclusion in Gross Receipts upon Gifts of Inventory, etc.), the value at the deceased’s death under the valuation method the deceased was required to use for those assets. 2. For crypto-assets acquired through a transfer under Article 40, paragraph 1, item 2, the sum of transfer consideration and the amount prescribed in that item.”

Article 119-6 of the income tax Order determines acquisition cost for individuals' crypto assets. Paragraph (1) has three categories and paragraph (2) two more. Although it looks difficult, the structure is simple: a list matching each acquisition route with the applicable amount.

Acquisition cost here is the amount “forming the basis for calculation of crypto asset valuation” under Article 119-2(1). Both total average and moving average aggregate acquisition costs to derive a per-unit figure. Without determining each acquisition's cost, subsequent calculations cannot begin.

The crypto assets concerned are those specified in Article 2(14) of the Payment Services Act, as referenced by Article 48-2(1) of the Income Tax Act. Tax law does not independently define their scope.

Overview

How is the acquisition cost of purchased crypto assets determined?

Paragraph (1), item (i) applies. Acquisition cost is “the purchase price (where there are purchase commissions or other expenses incurred to purchase the crypto assets, the amount including those expenses).”

The key lies in the parentheses. If therearepurchase commissions or other expenses incurred for the purchase,the amount including those expensesbecomes the acquisition cost. The provision does not say that adding them is optional. It requires their inclusion when such expenses exist.

Conversely, those expenses are incorporated into acquisition cost, rather than separately deducted when the purchase is made. Cash leaves at purchase, but its effect enters the calculation when the assets are sold or used, or through year-end valuation.

What constitutes “expenses incurred for the purchase”? The provision refers only to “purchase commissions and other expenses incurred to purchase the crypto assets,” without listing categories. This differs from Article 118-5(i) of the Order for Enforcement of the Corporation Tax Act, which lists “inbound freight, handling charges, transportation insurance, purchase commissions, customs duties (excluding incidental taxes prescribed in Article 2(1)(iv)-2 (Definitions) of the Customs Act), and other expenses incurred to purchase those short-term trading commodities, etc.” The scope depends on whether the expenditure can be regarded as incurred to purchase the particular crypto assets.

How are self-issued crypto assets treated?

Paragraph (1), item (ii) applies. The acquisition cost of “crypto assets acquired through self-issuance” is “the amount of expenses incurred for their issuance.”

The point to note is that their value at issuance does not become their acquisition cost. Whatever their market price, the provision identifies issuance expenses as acquisition cost. If issuance expenses are small, acquisition cost is limited to that amount.

That expense amount feeds directly into the calculation under Article 119-2(1). Both the cost of assets sold and year-end valuation are calculated from this starting point.

Where do crypto assets acquired other than by purchase or self-issuance fit?

Paragraph (1), item (iii) applies. It covers “crypto assets other than those listed in the preceding two items,” and acquisition cost is “the amount ordinarily required to acquire the crypto assets at the time of acquisition.”

Item (i) covers purchases and item (ii) self-issuance, so item (iii) serves as a catch-all for the rest. Its wording encompasses acquisitions through neither purchase nor self-issuance. Assets received through mining or staking, and those distributed through so-called airdrops, are also acquired without purchase or self-issuance. However, the provision does not expressly mention mining or airdrops and assign them to this item. This reading follows from the catch-all wording, “crypto assets other than those listed in the preceding two items.”

As to the amount, the provision says only “the amount ordinarily required to acquire the crypto assets at the time of acquisition.” It does not specify which exchange or which price to use.

How are inherited or gifted crypto assets valued?

Paragraph (2), item (i) applies. For gifts effective on death to an heir, inheritance, universal bequests, and specific bequests to an heir, it specifies “the amount valued at the time of the decedent's death using the valuation method that the decedent was required to apply to those crypto assets.” Ordinary lifetime gifts and similar transfers are excluded by the parenthetical provision in that item and are treated as acquired at market value at the time of the gift or bequest.

For these four categories of inheritance and similar succession, acquisition cost is not reset to market value on receipt. The recipient carries over the amount valued using the method the transferor “was required to apply.” Note that this does not describe ordinary lifetime gifts.

A separate provision determines the valuation method “required to apply.” Article 119-3(2) of the income tax Order requires a resident who acquires crypto assets, by the final tax return filing deadline, to “notify the district director of the tax office with jurisdiction over the place of tax payment in writing of the method to be applied from among the valuation methods prescribed in paragraph (1) of the preceding Article.” If no notification was filed, Article 119-5(1) sets the statutory method as “valuation at acquisition cost calculated using the total average method.” Thus, the notified method applies if notification was filed; otherwise, the total average method applies.

Paragraph (2), item (i) excludes, in parentheses, assets “acquired by a gift or bequest listed in Article 40(1)(i) of the Act (Inclusion in gross revenue in the case of gifts, etc. of inventory assets).” Paragraph (2), item (ii) sets the acquisition cost of “crypto assets acquired through a transfer listed in Article 40(1)(ii) of the Act” at “the sum of the consideration for the transfer and the amount specified in that item.” Article 40(1)(i) and (2) of the Income Tax Act value both the donor's gross revenue and the recipient's acquisition cost at the value when an ordinary gift or similar transfer occurs. Crypto assets are included under Article 87 of the Order. Article 40(1)(ii) concerns transfers at significantly low prices; under Article 119-6(2)(ii) of the Order, acquisition cost is the actual consideration plus the amount effectively gifted.

Where are the “special provisions”?

The opening wording of Article 119-6 says “except where otherwise provided.” The five categories discussed so far are therefore not exhaustive.

Crypto asset margin transactions are one example. Article 119-7 of the income tax Order provides that, where settlement is made through a sale and purchase, the amount included in necessary expenses is “notwithstanding Articles 119-2 through the preceding Article, the amount required to acquire the crypto assets pertaining to the purchase in that crypto asset margin transaction.” “The preceding Article” means Article 119-6. This provision takes precedence for settlement of margin transactions.

Points that require care in practice

• To what extent do fees paid to exchanges and transfer fees constitute “expenses incurred to purchase the crypto assets”? The provision does not list expense categories.
• For acquisition in exchange for other crypto assets, use market value at acquisition, corresponding to paragraph (1), item (iii). National Tax Agency FAQ 1-5 also describes acquisition by exchange as “other” acquisition. Keep records showing not only the exchange ratio but also yen-denominated market value at acquisition.
• For self-issuance, the question is which expenses to total as “expenses incurred for the issuance.”
• For acquisitions through neither purchase nor self-issuance, such as mining and airdrops, which price represents “the amount ordinarily required to acquire the crypto assets at the time of acquisition”? The amount also varies depending on when acquisition is deemed to occur.
• For an ordinary lifetime gift, verify market value at the time of the gift. Distinguish this from acquisition cost on inheritance, and confirm that the donor generally includes market value in gross revenue and the cost of the transferred assets in necessary expenses.
• For inherited assets, can the heir confirm whether the deceased filed a notification of the valuation method? Whether a notification was filed affects the calculation method.
• Article 119-2(2) provides that acquiring another crypto asset temporarily needed when purchasing, selling, or exchanging crypto assets for a different type “shall not be included” in the acquisitions specified in the items of paragraph (1). Whether a transaction counts as an acquisition affects the average unit cost calculation.
• The FY2026 tax reform indicates changes to taxation of individuals’ crypto-assets. Treatment of acquisition-cost rules must be confirmed in the statutory text. The Outline is discussed in Key points of the FY2026 tax system revision outline summarizing in

Legal basis

• Income Tax Act Enforcement Order, Article 119-6, paragraph 1 (Acquisition Cost of Crypto-Assets) / Quoted wording: “Unless otherwise provided, acquisition cost underlying valuation under Article 119-2, paragraph 1 shall be: 1. For purchased assets, purchase consideration plus commissions and other acquisition expenses. 2. For self-issued assets, issuance expenses. 3. For assets outside the preceding two categories, the value ordinarily required to acquire them at acquisition.”
• Order for Enforcement of the Income Tax Act, Article 119-6(2) (Acquisition Cost of Crypto Assets) / Quoted wording: “The acquisition cost under the preceding paragraph for the crypto assets listed in the following items shall be the amount specified in each item: (i) Crypto assets acquired by gift, inheritance, or bequest (excluding those acquired by a gift or bequest specified in Article 40(1)(i) of the Act (Inclusion in Gross Revenue in Cases of Gifts of Inventory Assets, etc.)): the amount valued at the time of the deceased's death using the valuation method the deceased was required to use for those crypto assets. (ii) Crypto assets acquired through a transfer specified in Article 40(1)(ii) of the Act: the total of the consideration for that transfer and the amount prescribed in that item.”
• Order for Enforcement of the Income Tax Act, Article 119-2(2) (Methods of Valuation of Crypto Assets) / Quoted wording: “Acquisition under the items of the preceding paragraph shall not include acquiring crypto assets other than those being purchased, sold, or exchanged for a different type, where such other assets are temporarily necessary for that purchase, sale, or exchange.”
• Order for Enforcement of the Income Tax Act, Article 119-3(2) (Selection of a crypto asset valuation method) / Quoted wording: “For crypto assets of the same type, the taxpayer must notify the district director of the tax office with jurisdiction over the place of tax payment in writing of the method to be applied from among the valuation methods prescribed in paragraph (1) of the preceding Article.”
• Order for Enforcement of the Income Tax Act, Article 119-5(1) (Statutory Crypto Asset Valuation Method) / Quoted wording: “The method shall be valuation at acquisition cost calculated using the total average method specified in Article 119-2(1)(i) (Methods of Valuation of Crypto Assets).”
• Order for Enforcement of the Income Tax Act, Article 119-7 (Acquisition cost of crypto assets through margin transactions) / Quoted wording: “Notwithstanding Articles 119-2 through the preceding Article, the amount shall be the amount required to acquire the crypto assets pertaining to the purchase in that crypto asset margin transaction.”
• Income Tax Act, Article 48-2(1) (Calculation of the cost of transferred crypto assets, etc. and their valuation methods) / Quoted wording: “Crypto assets prescribed in Article 2(14) (Definitions) of the Payment Services Act (Act No. 59 of 2009)”
• Payment Services Act, Article 2, paragraph 14 (Definitions) / Quoted wording: “Property value usable with unspecified persons and purchasable and sellable with unspecified counterparties.”
• Order for Enforcement of the Corporation Tax Act, Article 118-5(i) (Acquisition cost of short-term trading commodities, etc.) / Quoted wording: “Inbound freight, handling charges, transportation insurance, purchase commissions, customs duties (excluding incidental taxes prescribed in Article 2(1)(iv)-2 (Definitions) of the Customs Act), and other expenses incurred to purchase those short-term trading commodities, etc.”

Additional Authorities and Sources

• National Tax Agency: Tax Treatment of Crypto-Assets, etc. (FAQ), December 26, 2025
• Income Tax Act (e-Gov)
• Order for Enforcement of the Income Tax Act (e-Gov)

Sources checked September 7, 2026.