Thailand to Exempt Crypto Taxes for Investment tokens: Report

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Key takeaways:

  • For companies that offer investment tokens, Thailand’s cabinet waives the crypto tax.
  • The Thai government anticipates investment token transactions could produce more than $3.7 billion over the next two years.

The Thai government has decided to exempt businesses that issue investment tokens from corporate income tax and value-added tax (VAT).

According to Reuters, the Thai government is taking steps to profit from expanding the digital asset sector by permitting the tax-free issuance of digital tokens for investments.

Investors are included in the new crypto tax strategy in Thailand. Additionally, investors in these token transactions won’t be required to pay value-added tax. This is the value-added tax relief for cryptocurrency.

Companies will have access to alternative means of raising capital through investment tokens and more conventional strategies like debentures, according to the news shared on March 7 by deputy government spokesperson Rachada Dhnadirek.

Rachada added that the government anticipates that over the next two years, investment token sales will bring in 128 billion Thai baht ($3.7 billion). The state calculated potential tax revenue losses could total 35 billion baht ($1 million).

Thailand has made significant efforts to explain its domestic tax laws governing cryptocurrencies, and the government has proposed that investors be subject to a 15% capital gains tax beginning in early 2022. Following the government’s decision to abandon the plans, approved exchanges began exempting cryptocurrency traders from the 7% VAT a few months later.

Last year, local authorities worked to enact broader cryptocurrency regulations; Thailand’s Securities and Exchange Commission will outlaw the use of crypto for purchases in March 2022.

Utility tokens, however, are not exempt from taxes under this cryptocurrency strategy. According to the finance minister, this stance is due to the reality that their use is reliant on the marketing efforts of their issuers.

The government loosened tax regulations for crypto trading last year to encourage business growth. However, the use of digital assets as a form of payment has been outlawed by the nation’s central bank and other regulators, who claim that doing so could harm the economic and financial stability of the nation.

The announcement comes as the Thai SEC continues to develop stricter cryptocurrency laws to safeguard investors. The financial regulator implemented new regulations for cryptocurrency custody services in January 2023, requiring all crypto custodians to have a backup plan in place in the event of unforeseen circumstances.

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