Thailand scraps 7% digital asset tax for traders in new relaxed tariff laws

Getting your Trinity Audio player ready...

Thailand is reportedly set to relax its taxation policies even further for digital currency traders as it seeks to promote an industry that has exploded in the past year in the Southeast Asian country. The country will scrap a 7% tax for traders on authorized exchanges, just a month since exempting them from a 15% capital gains tax.

Thailand’s cabinet approved the new relaxed tax rules on March 8, paving the way for more aggressive growth of digital currency trading in the country. 

Under the new taxation regime, traders can offset annual losses against gains for taxes due on their digital asset investments. With the highly volatile digital asset market, the new law will be a godsend for traders who have had to pay taxes on gains with no consideration to periods when the prices dip, and their portfolios are nearly wiped clean.

Even more significantly, the 7% value-added tax has been scraped for traders using authorized exchanges, Finance Minister Arkhom Termpittayapaisith said in a news conference.

The minister said the new tax regime will be effective from April 2022 to December 2023. It will also extend to the trading of the retail digital baht, the country’s upcoming CBDC, although the timeline for the launch of the digital currency is still unclear.

The government is also looking to incentivize investment in Thai startups with its new tax rules. The cabinet approved tax breaks for direct and indirect investment in startups, with investors who invest for at least two years in startups being offered a tax break for ten years up until June 2032.

A month ago, tax officials in the country announced that they had scrapped plans to introduce a 15% withholding tax on digital asset transactions. This was after traders staged a strong pushback against the proposal, which they said would kill the burgeoning industry.

As some of the leaders of registered exchanges in Thailand revealed at the time, the country’s tax agency reached out to many stakeholders to discuss the planned taxation before deciding to scrap it.

Thailand has become of the world’s biggest digital asset markets. According to the government, over 2 million trading accounts are on registered exchanges, up from less than 200,000 a year ago. With tourism taking a hit from lockdowns brought about by the COVID-19 pandemic, many looked to digital assets to make an extra buck. 

But despite the implosion in trading, Thailand’s market is dominated by Bitkub exchange. Bitkub, which recently sold a 51% stake to Siam Commercial Bank for half a billion dollars, controls about 90% of the Thai market, according to some estimates.

Watch: CoinGeek New York panel, Government & Public Sector Applications on Blockchain