Thailand’s cabinet, Khana Ratthamontri, has relaxed tax rules for investments in digital assets including cryptocurrencies and digital tokens to help promote and develop the market following a surge in cryptocurrency trading in Southeast Asia’s second-largest economy.
Thailand’s Tax Rules For Digital Assets
The rules, in line with an earlier announcement, will allow traders to offset annual losses against gains for taxes due on cryptocurrency investments, and exempt a value-added tax of 7% for cryptocurrency trading on authorized exchanges, Finance Minister Arkhom Termpittayapaisith told a news conference.
The tax exemption will be in effect from April 2022 to December 2023. It will also cover the trading of retail central bank digital currency to be issued by the central bank, he said.
Recently, Thailand announced the scrapping of its planned 15% withholding tax on cryptocurrencies, following pushback from the crypto community.
Digital assets have grown fast in Thailand over the past year, with trading accounts surging to about 2 million at the end of 2021 from just 170,000 earlier that year, a ministry official said in January 2022.
Bitcoin (BTC) is the most popular cryptocurrency in Thailand.
The cabinet also approved tax breaks for direct and indirect investments in startups, Arkhom said. Investors who invest for at least two years in startups will be offered a tax break for 10 years until June 2032.
Thailand Guidelines On Taxation Of Digital Assets
In February, the Thai Revenue Department had clarified how cryptocurrency and digital tokens (digital assets) will be taxed, several years after the government included provisions in the Revenue Code to tax digital assets.
Citing the difficulty of determining the appropriate tax to be imposed on digital asset transactions carried out through regulated exchanges, the tax authorities announced that gains from trading digital assets will only be taxed if the selling price of a digital asset exceeds its acquisition cost.
The tax authorities also provided guidelines for taxing cryptocurrency mining, digital assets received as salaries/wages or gifts, and profits from holding digital assets as investments.
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