Cabinet OKs digital asset draft decrees

Cabinet OKs digital asset draft decrees

Regulatory scheme, tax ready for vetting

Nathporn Chatusripitak, a spokesman for Deputy Prime Minister Somkid Jatusripitak
Nathporn Chatusripitak, a spokesman for Deputy Prime Minister Somkid Jatusripitak

The cabinet on Tuesday approved in principle the drafts of two royal decrees, one to regulate digital-asset-related transactions and another to amend the Revenue Code to let the tax-collecting agency impose levies on digital assets.

Nathporn Chatusripitak, a spokesman for Deputy Prime Minister Somkid Jatusripitak, said the new law governing digital-asset-related transactions will cover cryptocurrencies and initial coin offerings (ICOs).

However, the draft still needs to be vetted by the Council of State before being submitted to the cabinet for final approval next week.

Mr Nathporn said Deputy Prime Minister Wissanu Krea-ngam reported to the cabinet yesterday that the government needs to issue a new law to comprehensively regulate cryptocurrencies and ICOs because they may be used for money laundering, tax avoidance and crime, which could hurt investors.

Mr Wissanu told the cabinet that the new law is not meant to prohibit cryptocurrencies, ICOs and any other digital-asset-related transactions, but to protect investors who invest in the digital assets.

Digital assets are defined by the draft law as cryptocurrencies, digital tokens and other assets in the form of electronic data, as specified by the Finance Ministry.

Mr Wissanu said the Finance Ministry and the Securities and Exchange Commission (SEC) are working on organic laws that require all digital asset transactions, including those of digital asset exchanges, brokers and dealers, to be registered with the relevant authorities.

According to a source from Government House, the cabinet also yesterday approved in principle a draft of a royal decree to amend the Revenue Code to pave the way for the tax-collection agency to impose a 15% capital gains tax on investment gains and benefits from digital assets.

The source said the cabinet next week will consider the exact rates of the capital gains tax.

A source at the Finance Ministry said the Council of State will later finalise the capital gains tax for investment in digital assets.

The ceiling withholding tax is set at 15%, but the Revenue Department charges a 10% levy on capital gains.

Although the Revenue Department can use authority under the Revenue Code's Section 40(8) regarding income derived from other activities to tax cryptocurrency investments, the tax-collecting agency wants to set clear guidelines for such benefits and payments, the source said.

After the cabinet approved in principle the drafts to regulate digital currency and amendment of the Revenue Code yesterday, the Finance Ministry, the Bank of Thailand, the SEC and Anti-Money Laundering Office will jointly discuss the complete details of the law with the Council of State within one week, as assigned by the cabinet.

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