The Thai government has announced that companies issuing digital tokens will receive a tax exemption from paying corporate income tax and value added tax. According to reports, the Thai government expects to lose just over $1 billion in tax revenue as a result of the exemptions.
Tax Relief for Investments in Digital Assets
Companies based in Thailand that issue digital tokens for investment will receive exemptions from corporate income tax and value-added tax, the Thai governmentreported. As a result of the exemption, the Thai government, which expects to offer $3.71 billion (128 billion baht) worth of investment tokens over the next two years, will lose more than $1 billion in tax revenue.
According to government spokesperson Rachada Dhnadirek, such investment token offerings are in addition to traditional methods of raising capital, such as corporate bonds for Thai companies, which are exempt from taxes, according to a cabinet decision. The government agreed to the tax exemption exactly one yearafter it announced
the easing of the tax regime for investments in digital assets.
At the time, Arkhom Termpittayapaisith, the country’s finance minister, said the rule change would help promote and develop Thailand’s cryptocurrency industry; according to a Reuters report in March 2022, the new rules would allow “traders to offset the tax on cryptocurrency investments on cryptocurrency investments, and can offset their annual losses against their profits.” The report added that the rules also “exempt from 7% VAT for cryptocurrency transactions on licensed exchanges.”
Protection of Digital Asset Users
In addition to preserving the stability of the country’s financial system, the new rules ostensibly also aim to protect digital asset users. For example, Bitcoin.com News reported in late January 2023 that crypto custody service providers are now required to put in place mechanisms to ensure “efficient storage of digital assets and keys.”
Prior to this, the Securities and Exchange Commission of Thailand had issued regulations requiring crypto companies to “inform potential customers of investment risks through advertising.”
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