More good news is on the horizon for cryptocurrency investors in Thailand. The country’s Revenue Department announced that it would be waiving the 7% value-added tax (VAT) for all individual cryptocurrency investors.
When the royal decree providing the legal framework for all cryptocurrencies and initial coin offerings (ICOs) came into force on Monday, it was met with criticisms that the regulations would only hinder the tech startups from raising funds via token crowdsales. To address this concern, Saroch Thongpracum, director for legal affairs of the Revenue Department, confirmed that there will be a regulation that will exempt individual investors from paying the VAT “to reduce their tax burden.”
“The Revenue Department will waive value-added tax for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC). Individuals will still have to pay a 15 percent capital gains tax, also known as a withholding tax, on income earned in a transaction,” Thongpracum said.
Thai media outlets reported that under the new law, private companies who are launching ICO’s would have to pay corporate income tax on any funds raised from the process.
The decree provides clarification that the Thai SEC will be the sole regulator of digital assets with three groups being regulated. These will be brokers, dealers and ICO portals which must obtain a license from the Finance Minister to operate, according to a spokesperson for the department.
The SEC is expected to issue regulations on cryptocurrencies and ICOs by the end of June after it holds a public hearing on the issue. The SEC Secretary General Rapee Sucharitakul was quoted by the Bangkok Post saying that the hearing will take around two to three weeks since investments in digital tokens carry considerably high risk. At the moment, ICOs are still banned in Thailand.
“The new regulation aims to provide protection for general investors since only investors who have knowledge of ICO issuance or digital-asset transactions should be allowed to engaging in this kind of trading,” Sucharitakul said.
The Bank of Thailand, which previously warned financial institutions from dealing with cryptocurrencies, announced that it would wait for further details from the SEC before taking any further action.