Thailand’s Revenue Department has announced that it will waive the 7% value-added tax for individual cryptocurrency investors. The country began regulating digital currencies and initial coin offerings on Monday, putting the Thai Securities and Exchange Commission (SEC) in charge of the regulations.
The decree to provide the legal framework for cryptocurrencies and initial coin offerings (ICOs) in Thailand went into effect on Monday.
Cryptocurrency transactions are currently subject to income tax for both private companies and individual investors, Nation Multimedia explained. Saroch Thongpracum, Director of Legal Affairs of the country’s Revenue Department, announced at a press conference on Tuesday:
The Revenue Department will waive value-added tax for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC).
However, Mr. Saroch emphasized, “Individuals will still have to pay a 15 percent capital gains tax, also known as a withholding tax, on income earned in a transaction.”
The VAT waiver for individual cryptocurrency traders aims to “reduce their tax burden,” the publication noted, adding that the Revenue Department “would issue a regulation waiving the 7 percent VAT for individual investors.”
Furthermore, the news outlet detailed, “Under the new law, private companies launching ICOs have to pay corporate income tax on the funds they raise from the exercise.”
Full Regulations Expected Next Month
According to the decree, the Thai SEC will be the primary regulator of digital assets. Three groups of crypto operators will be regulated: brokers, dealers, and ICO portals. They must obtain licenses from the Finance Minister, according to the department’s spokesperson.
The SEC chief says that the Commission expects to issue regulations on cryptocurrencies and ICOs by the end of June after holding a public hearing. “The public hearing will take 2-3 weeks because investments in digital tokens are complicated and carry high risks,” the Bangkok Post reported SEC secretary-general Rapee Sucharitakul conveying. During this time, ICOs are banned in the country.
The news outlet then quoted Mr. Rapee elaborating:
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.
Meanwhile, the Bank of Thailand (BOT) announced that it will wait for the SEC to release more details of the regulations before it will take any action, Assistant Bank of Thailand governor Chantavarn Sucharitakul told the publication. The central bank has previously requested financial institutions in the country to refrain from dealing with cryptocurrency transactions.