Thailand is exempting crypto traders from paying a hefty tax to strengthen the country’s ambitions to become an Asian digital assets hub.
The Finance Ministry will remove the need to pay a 7% value-added tax on earnings from trading cryptocurrencies and digital tokens, according to local news outlets.
The exemption aims to encourage digital assets as a fundraising alternative, said Paopoom Rojanasakul, the finance minister’s secretary, according to the Bangkok Post, which reported on the extended exemption.
The exemption, previously set to expire at the end of 2023, will now permanently apply to transactions executed through Thailand’s licensed digital asset exchange operators.
Trades conducted by licensed brokers and dealers will also be exempted.
If VAT was previously applied to crypto transactions, it would mean that every time someone bought, sold, or traded cryptocurrencies, they would be subject to the tax, significantly increasing the cost of each trade.
This exemption continues to apply to the transfer of cryptocurrencies to another party, which has been in place since the order was first introduced in April 2022.
The ministry did not return DL News’ requests for comment.
Thailand turns to crypto
The indefinite VAT exemption is part of the country’s plans to attract crypto investment and stimulate economic growth following a slow year in goods exports and the tailwind impact of Covid-19 on its tourism sector.
Its securities regulator already introduced more crypto-friendly rules in January.
Even so, Thailand is still taking a cautious approach to the asset class, having restricted the use of cryptocurrency for payments over concerns it could harm the country’s financial health.
In 2018, the country established a licensing regime for cryptocurrency exchanges and brokers under the Digital Asset Business Emergency Decree.
The measure, aimed at ensuring the security and compliance of digital asset services, requires platforms to meet strict operational standards in what authorities believe will continue to safeguard the financial system and enhance consumer protections.
Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.
