Thai Finance Minister Apisak Tantivorawong takes Thailand one step closer to enacting taxes on cryptocurrencies. Investors are expecting to face a 7 percent value-added tax (VAT) for all trade in addition to a 15 percent tax on capital gains.
Nikkei Asian Review, a local news outlet reported that the most awaited cryptocurrency tax structure in Thailand has been announced by the Thai finance minister.
On March 27, Apisak Tantivorawong, Thai finance minister announced the cryptocurrencies tax framework will reportedly include all retail trading and returns on cryptocurrency investments. He also reported to the cabinet that all cryptocurrency trades would be tax at a rate of 7% VAT. And the returns will be taxed at 15% capital gains tax.
The government of Thailand issued the first draft concerning the regulation of transaction of cryptocurrency. Thus including taxes on crypto-related investment in mid-March. And final draft on March 30, stating that tax on cryptocurrency gains will stay at 15%.
A lot of uncertainty has been observing in Thailand regarding crypto regulation, particularly on ICO. It had caused the Thai Digital Asset Exchange to halt the trading of ICOs in the Month of February. In order to wait for the Securities and Exchange Commission’s of Thailand announced a regulatory structure.
Moreover, the Thailand central bank’s governor asked all the country’s bank to not to involve in cryptocurrency trading and investing activities. Additionally, it is also to stop participating in and creating cryptocurrency exchanges and other crypto trading platforms. However, this announcement was only for the country’s banks, not to exchanges or other crypto services.
According to the Apisak, the new regulations are enforcing to follow in order to prevent from criminal activities. Including money laundering, and tax evasion which has been reporting on the crypto sector.
As per the Chairman of the Thai Fintech Association Korn Chatikavanji
“We have to be very careful not to allow crypt conservation instincts to result in draconian regulations.”
This new regulation is making crypto startups to establish their businesses in more crypto-friendly countries like Singapore. One of the best examples for this is Six.network which is registered in Singapore although it held its ICO in Bangkok.
According to Nikkei Asian reviews that Six.network are functioning with consulting the Thai SEC to “constantly clarify the operation to ensure transparency.”
Therefore, Finance Ministry of Thailand and the SEC are also building an organic law. However that would need cryptocurrency exchanges, dealers and brokers to list with appropriate authorities.