Thailand’s awaited tax framework for cryptocurrencies has been announced this week by the Thai Finance Minister, local news outlet Nikkei Asian Review reported Friday, March 30.
Apisak Tantivorawong reported during a March 27 cabinet meeting that crypto trades will be taxed with a 7 percent value added tax (VAT), and returns taxed with a 15 percent capital gains tax. The first draft of the digital asset regulations, released March 14, showed that the expected tax ceiling for the digital gains crypto tax in Thailand was 15 percent.
The previous uncertainty in Thailand surrounding crypto regulations, particularly in regards to Initial Coin Offerings (ICO), had caused the Thai Digital Asset Exchange (TDAX) to pause ICOs in February in order to wait for the Thailand’s Securities and Exchange Commission’s (Thai SEC) release of a regulatory framework.
Earlier in February, the governor of Thailand’s central bank had asked all banks to stay away from investing and trading in cryptocurrency, as well as participating in and creating exchanges and platforms for crypto trading. This central bank circular only applied to banks, not to exchanges or other crypto services.
The Nikkei Asian Review wrote Friday that the new regulations have been designed to “prevent the expanding [crypto] sector from being used for money laundering, tax evasion, and other criminal activities.” The former Finance Minister, now chairman of the Thai Fintech Association, Korn Chatikavanij, noted that the Thai government has to “be cautious not to allow their conservation instincts to result in draconian regulations.”
According to the Nikkei Asian Review, Thai crypto startups are looking to the more crypto-friendly Singapore as an alternative for locating their business, citing Thai and South Korean platform Six.network – which is registered in Singapore although it held its ICO in Bangkok – as an example. The Nikkei Asian Review notes that Six.network is working with the Thai SEC to “constantly clarify the operation to ensure transparency,” citing its co-founder, Natavudh Pungcharoenpong.
Thai company J Ventures did hold an ICO in Thailand in February, raising $21 mln by selling all of its 100 mln JFin tokens within 55 hours. Cointelegraph reported on March 21 that the “coin’s future has become unclear” as even already-issued ICOs will purportedly have to comply with any future regulations within a six month period.