Taxman to go easy on crypto traders

The Finance Ministry plans to ease tax rules for investments in digital assets, a senior official said on Friday, following a surge in crytocurrency trading.

The relaxed rules will allow traders to offset annual losses against gains for taxes due on cryptocurrency investments, and exempt certain transactions from the 7% value-added-tax, said Ekniti Nitithanprapas, director-general of the Revenue Department.

The rules will apply to transactions conducted via business operators or exchanges regulated by the Securities and Exchange Commission (SEC), he said.

A 15% withholding tax will also not be required for transactions conducted on such exchanges, he added.

Digital assets have rapidly gained momentum in Thailand over the past couple of years, with average daily trading surging to 4.8 billion baht from just 240 million baht, said Mr Eknithi.

Trading accounts had jumped to about 2 million at the end of 2021 from just 170,000 early in the year.

“The world is changing fast and we have to adjust to keep up with that,” he said.

Local digital exchange operators had earlier requested a two-year tax exemption for cryptocurrency trading, claiming the industry needs more time to generate sustainable growth momentum.

Operators also maintain that it would be unfair to them if the Revenue Department taxed them on profits while not allowing them to claim deductions for losses.

Final guidelines for tax calculation will need to comply with existing laws and are expected to be disclosed by the end of this month, the SEC has said.