Thailand‘s Cabinet approved a tax waiver for cryptocurrency firms yesterday. The Cabinet decided that companies raising funds by issuing digital tokens for investment are exempt from paying corporate income tax and value-added tax (VAT), according to a government spokesperson.
Once the new tax waiver is implemented, crypto companies can issue investment tokens in Thailand without any tax on primary or secondary sales.
Analysts predict that the new tax waiver will cost Thailand more than US$1 billion (35 billion baht) in taxes within the next two years, resulting in approximately US$3.7 billion in initial coin offerings.
As more and more people start investing in cryptocurrencies like Ethereum, Bitcoin, etc., Thailand has made continual moves to regulate crypto, showing more interest than other nations. But the ruling elite has given mixed signals about their support of the trade.
The Tourism Ministry promotes Thailand as crypto-friendly. However, Thailand’s Securities and Exchange Commission (SEC) banned crypto payments in March last year. Investment and trading were allowed to continue.
In the same month, Thailand relaxed tax rules for crypto traders – scrapping plans to charge 7% VAT on crypto trading.
In September last year, SEC tightened rules on crypto advertising in Thailand. SEC said…
“Operators must give details of ads and spending including the use of influencers and bloggers to the SEC including terms and time frame,” adding that operators had 30 days until the rule kicked in.
Cryptocurrency is a digital or virtual currency that uses cryptography to secure and verify transactions as well as to control the creation of new units. Unlike traditional currencies, such as dollars or euros, cryptocurrencies are decentralised and operate on a distributed ledger technology called a blockchain.
Cryptocurrencies allow users to transfer funds directly between parties without the need for intermediaries such as banks or payment processors. They also offer a level of anonymity and privacy, as transactions are recorded on the blockchain without revealing the identity of the individuals involved.
Crypto has become increasingly popular as an investment vehicle, and many businesses have started to accept crypto as a form of payment. However, their value can be highly volatile and their legality varies across different jurisdictions.
Thailand is also developing their Central Bank Digital Currencies – the digital form of a government-issued currency that isn’t pegged to a physical commodity. In 2023, 11 countries worldwide have fully launched digital currencies.
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