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Thailand’s cabinet has approved a tax exemption for cryptocurrency earnings to promote investment token fundraising, several local news outlets confirmed.
Thailand’s improving regulatory stance toward crypto has already caught the attention of some big players in the industry. On March 13, the Thai cabinet approved a measure that exempts individuals from certain types of taxes on investment tokens
Thai Cabinet’s Tax Exemptions
The new measure will focus on earnings from investment tokens, exempting these profits from personal income tax calculations. The Thai cabinet has two different types of crypto tax exemptions, capital gains tax and value added tax.
Capital Gains Exemptions
By removing the 15% capital gains tax on investment tokens, holders do not need to include their profits when calculating their income tax, thus eliminating double taxation.
For example, if someone has sold their investment and received profit on the sale, they first had to give 15% tax on the profits as well as income tax on the total income plus the previous profit this used to cause double taxation. After this move, the individual will not have to pay the tax on the profit twice.
Value Added Tax Exemptions
This move by the government also eliminates the value added tax or VAT on crypto transactions, making digital assets more accessible to a wider audience. Thailand is aiming to attract crypto investment and stimulate economic growth, particularly after a challenging year due to a slowdown in goods exports and the adverse effects of the COVID-19 pandemic on its tourism industry.
Benefits of These Exemptions
The Thai Securities and Exchange Commission (SEC) said that Thailand expects about 18.5 Billion baht (about $519 Million) in token investments over the next nine months.
Sergio S, CEO and co-founder of crypto market-making service provider Coinrate commented that Thailand is taking a decisive step. This step is toward asserting itself as a global center for digital assets. It is done by extending the exemption from VAT on cryptocurrency trading, which enhances the country’s attractiveness to crypto investors and traders, reducing financial barriers and stimulating market activity.
On the other hand, last month, the SEC eased some restrictions on investing in digital tokens. These included lifting investment limits on digital tokens backed by real estate or generating real estate income streams, as well as those with infrastructure operations or revenue streams.
Moreover, the regulator also reviewed the criteria for establishing custodial wallet provider businesses, enabling them to offer services to digital asset business operators.
Binance recently unveiled its joint venture crypto exchange Binance Thailand, which provides a platform for digital asset exchange services with Thai baht trading pairs.
In addition to this, Kulaya Tantitemit, director-general of Thailand’s Revenue Department, reportedly said that the Ministry of Finance through the Revenue Department recognizes the importance of digital tokens for investment (Investment Token), which will be another tool for raising funds for business operators in the country.
Summary
Thailand government’s measures combined with the latest cabinet nod will help push the country to the forefront as a global hub for investment fundraising, authorities said. The move of removing VAT as well as capital gains tax is predicted to increase investments by about half a Billion dollars.
Disclaimer
The views and opinions stated by the author or any people named in this article are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading in stocks, cryptos, or other related indexes comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
