Tax burdens on crypto investors in Thailand are being lowered from April 2022 to December 2023 in a bid to leverage the growing crypto industry for the country’s economic growth.
Cryptocurrency VAT Exemption
The crypto industry in Thailand has experienced significant growth. As the second-largest economy in Southeast Asia, Thailand is hoping to continue on this upward trajectory, as is evident from the relaxed taxation laws. At a finance ministry meeting on Tuesday, the cabinet approved tax relief measures to give crypto traders an opportunity to recover their losses.
The most noteworthy measure taken was the temporary dismissal of the 7% value-added tax (VAT) on crypto trades on regulated exchanges from April 2022 to December 2023. The thought behind this exemption is to allow crypto traders to reap more profits by paying less in taxes and letting them offset their losses against gains made in the same financial year.
As a consequence, the upcoming Thai CBDC, i.e., the central bank digital currency piloted by the Bank of Thailand, will also be exempt from VAT charges under this landmark decision.
The proposed capital gains tax has been scrapped.
The previously proposed taxation rates were extremely harsh for crypto traders in Thailand. Earlier this year, the Finance Ministry announced that a 15% capital gains tax would be imposed on all crypto traders. The only saving grace was that the tax would not affect exchanges, and only on individuals dealing in cryptocurrency. The crypto industry in the country fought back against the 15% tax, which resulted in the proposed tax plan being scrapped.
Additionally, crypto investors and traders have also been asked to file their crypto income separately for the 2022 financial year. However, there has been considerable pushback in the community over this requirement due to the fluctuating status of the Thai Baht (THB) with respect to the US dollar. Since most crypto trading pairs are tied to the USD, it becomes extremely complicated to file income generated from this asset in THB.
Thai Authorities Adopt Crypto-Friendly Approach For Russian Tourists
As crypto boomed in the country over the last year, there have been multiple hot and cold responses from the regulatory authorities like the Bank of Thailand, the Thai Securities and Exchanges Commission, and the Ministry of Finance. However, in light of the Russia-Ukraine conflict, the authorities are exploring crypto payments to overcome financial restrictions imposed on Russian tourists stuck in Thailand.
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