In a bid to spur the utilization of investment tokens for fundraising, the Thailand government has given the green light to tax breaks for individuals holding these tokens.
On March 13, the Bangkok Post reported that Thailand’s cabinet had endorsed the tax breaks for investment tokenholders. According to the report, individuals profiting from holding investment tokens and facing a 15% withholding tax deduction could now exclude this income when computing their personal income tax.
Kulaya Tantitemit, Director-General of Thailand’s Revenue Department, highlighted that the tax measures, effective since Jan. 1, aim to foster fundraising through investment tokens and position the nation as an investment hub. Tantitemit expressed optimism that this initiative would stimulate the country’s economy, fueling investment and job creation.
However, the approved tax break comes with conditions. It applies solely to individuals refraining from requesting full or partial refunds of the deducted tax or claiming a deducted tax credit.
Thai Government Extends Tax Breaks to Investment Token Issuers
In addition to individuals, the Thai government has extended tax breaks to investment token issuers. On March 7, authorities announced the waiver of corporate income tax and value-added tax (VAT) for investment token issuers.
Deputy Government Spokesman Rachada Dhnadirek elucidated that this move opens up an alternative fundraising avenue, complementing traditional methods. Dhnadirek stated the government’s anticipation of investment tokens generating approximately $3.7 billion in capital over the ensuing two years.
Evolution of Crypto Taxation in Thailand
Thailand’s journey with crypto taxation has been tumultuous. In January 2022, the country imposed a 15% capital gains tax on crypto traders operating within its jurisdiction. This move was accompanied by an advisory urging investors to diligently report their crypto income in tax declarations to evade penalties.
However, the introduction of the capital gains tax faced significant opposition from traders, prompting the government to suspend its implementation on Feb. 1, 2022.
Subsequently, Thailand revised its tax policy, introducing exemptions over a month later. On March 8, 2022, a new tax policy exempted traders on authorized exchanges from a 7% VAT on crypto transactions.
