Facebook's Libra traders will be liable for a 15% withholding tax if the Securities and Exchange Commission (SEC) identifies the stablecoin as a digital asset, says the head of the Revenue Department.
Online transactions and foreign-based tech platforms' income in Thailand are difficult to tax because current law permits the department only to impose corporate income tax on entities with a physical presence in the country, said director-general Ekniti Nitithanprapas.
Taxing online platforms that are not permanently established in a country's territory has become a global problem that requires cooperation from other countries, Mr Ekniti said, adding that Thailand alone cannot successfully tax them.
According to the digital asset royal decree, digital assets include cryptocurrencies, digital tokens and any other electronic data units as specified by the SEC.
The new legislation was enacted and took effect in May 2018 to regulate digital asset offerings and businesses undertaking digital asset-related activities.
The government also amended the Revenue Code, which stipulated that individuals who gain and receive benefits from putting money into digital assets are subject to a 15% withholding tax.
Firms that make digital-asset-related trades will be liable for a 7% VAT payment from the transaction value, on top of the 15% withholding tax.
Mr Ekniti said 67,000 small and medium-sized enterprises (SMEs) have already signed up to sort out their financial accounts from 2016-17 to meet standards to avoid late-payment penalties and criminal liability.
The Revenue Department is giving SMEs that registered in 2016 but failed to sign up until Oct 1 to comply with the single account requirement.
Under the scheme, SME participants are required to pay a delinquency tax for the period from 2016 until now in return for waivers of fines and criminal liability. The department is requiring these SMEs to electronically submit tax forms from July 1, 2019 to June 30, 2020.
Under the single account scheme, the Bank of Thailand requires banks to give greater consideration to financial statements submitted to the Revenue Department when considering SME loans, starting this year.
The Revenue Department managed to surpass the tax revenue target by 38 billion baht during the October-to-May period.
With the higher-than-targeted tax revenue, Mr Ekniti expressed confidence that the department's target of 2 trillion baht for fiscal 2019 is achievable.
Higher efficiency in tax collection after the Revenue Department adopted innovative technology could be the cause of the high tax revenue, he said.