Cabinet okays easing levies on digital assets
The cabinet agreed to ease tax regimes on Tuesday for investments in digital assets in a move to promote the digital economy.
According to government spokesman Thanakorn Wangboonkongchana, the cabinet approved two royal decrees: one regarding the Finance Ministry to waive the 7% value-added tax (VAT) on cryptocurrency transactions and another about the Bank of Thailand to waive VAT on the transfer of digital currency to be issued by the Bank of Thailand as part of its test of Retail Central Bank Digital Currency.
The measures take effect one month after the cabinet's approval or until Dec 31, 2023.
The cabinet also yesterday approved the Finance Ministry regulation that allows investors who trade in digital assets to only pay tax based on their net profit. They are allowed to deduct their losses before paying tax on the net profit. However, this methodology will only be applied to trading conducted on digital asset exchanges that operate in line with SEC regulations.
Currently profits earned from cryptocurrency trading, Bitcoin mining and the dividends or interest gained from investment in cryptocurrencies are subject to a 15% withholding tax per transaction.
The ministry reported to the cabinet yesterday digital assets have rapidly gained momentum in Thailand over the past couple of years, with average daily trading surging to 4.83 billion baht from 240 million baht in 2018. Trading accounts have jumped to roughly 115 billion baht in value from 9.6 billion in 2018, while users numbered 1.98 million at the end of 2021, up from 170,000 in 2018.
Finance Minister Arkhom Termpittayapaisith said the cabinet also approved in principle tax measures to support investment in local startups that are targeted businesses.