The updated tax policy exempts cryptocurrency dealers from the mandatory 7% VAT on recognised exchanges and provides tax breaks of up to ten years for crypto startup investors.
Thailand’s finance ministry has reportedly relaxed crypto tax restrictions in order to encourage investment in the digital asset market.
The tax revisions come just a few weeks after the government abandoned initial plans to impose a 15% tax on cryptocurrency gains. According to Reuters, the new tax policy exempts cryptocurrency traders from the 7% value-added tax (VAT) on regulated exchanges.
Additionally, the proposed tax policy would allow traders to deduct annual losses from gains on their crypto investments. This is a significant relief for traders, as the majority of governments are now focused solely on capital gains, disregarding the losses sustained by traders as a result of crypto market volatility. The new tax exemptions would take effect in April 2022 and would remain in place until December 2023.
The new tax policy guarantees tax breaks of up to ten years for those who invest in crypto companies in the country for at least two years.
Finance Minister Arkhom Termpittayapaisith stated that the amended tax regulations were created to foster growth in South East Asia’s second-largest economy’s embryonic digital asset industry. Thailand has developed into one of Asia’s premier crypto destinations, owing to the government’s crypto-focused regulations and willingness to collaborate with ecosystem players.
The new tax regulations could also serve as a model for other countries considering imposing some type of cryptocurrency taxation. Indian crypto traders have been clamouring for something similar following the Indian government’s announcement of a 30% tax on crypto assets without accounting for dealers’ losses.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.