The Finance Ministry has announced the exemption of value-added tax (VAT) on digital asset trading to push Thailand towards becoming a digital asset hub.
Paopoom Rojanasakul, secretary to the finance minister, said the ministry wants to promote digital assets as a new alternative tool for fundraising.
The authorities hope that this will support the growth of the digital asset industry in Thailand as well as provide the necessary boost to facilitate the country's digital economy in the near future.
Aiming to develop Thailand to be the region's digital asset hub, the ministry has eased tax rules by suspending the requirement to pay 7% VAT on income derived from cryptocurrency and digital token trading.
The VAT exemption is effective on Jan 1, 2024, with no expiration date.
The transfer of digital investment tokens to a third party is still exempt from VAT. This has been the case since May 14, 2023.
The VAT exemption on digital asset trading, which used to be applicable only to authorised digital asset exchanges, now includes brokers and dealers under the supervision of the Securities and Exchange Commission (SEC).
In the meantime, the Finance Ministry and SEC are in the due process of amending the 2019 Securities and Exchange Act to enable digital investment tokens to resemble securities.
Since Thailand has grown to become one of the top jurisdictions for offshore digital asset investors, the new tax policies could potentially provide the necessary boost to further expand the country's digital asset market.
However, Mr Paopoom said the government should also take into consideration the stability of the financial system while harnessing its development potential.