Thailand Allows Tax Exemption for Token Incomes

The Thai government has given its approval for tax breaks to be granted to individuals who hold investment tokens. This move is part of an effort to encourage the use of investment tokens for fundraising purposes. The decision was reported by the Bangkok Post on March 13. According to the director-general of Thailand’s revenue department, Kulaya Tantitemit, individuals who make a profit from holding investment tokens and have 15% withholding tax deducted will be able to exclude this income when calculating their personal income tax. These tax measures went into effect on January 1 and are intended to make Thailand a hub for investment and stimulate the country’s economy by promoting investment and creating more employment opportunities.

It is important to note that while the tax break was approved, it will only apply to individuals who do not request full or partial refunds of the deducted tax or claim a deducted tax credit. In addition to benefiting individuals, the Thai government has also introduced tax breaks for issuers of investment tokens. On March 7, the government announced that corporate income tax and value-added tax (VAT) for investment token issuers will be waived. Deputy government spokesman Rachada Dhnadirek explained that this will give firms access to an alternative fundraising method, such as investment tokens, in addition to traditional fundraising methods. The government hopes that this move will result in around $3.7 billion in capital being generated through investment tokens over the next two years.

The issue of crypto taxation in Thailand has been a contentious one. In January 2022, the country introduced a 15% capital gains tax for crypto traders operating within its borders. The government urged investors to declare and report their crypto income in tax filings to avoid penalties. This decision faced significant opposition from the public, prompting the government to suspend the implementation of the capital gains tax on February 1, 2022. The tax regulations were then revised to allow for exemptions a month later. On March 8, 2022, a new tax policy was introduced that exempts traders on authorized exchanges from a 7% VAT on crypto.

The Thai government’s approval of tax breaks for investment token holders and issuers is aimed at promoting the use of investment tokens for fundraising purposes. The government hopes that this move will position Thailand as an attractive investment destination and stimulate economic growth. It remains to be seen how these tax measures will impact the country’s crypto market and whether they will achieve the desired results.