To encourage the use of investment tokens for fundraising, Thailand’s government has authorized tax exemptions for holders of such tokens.
The Bangkok Post, a local news outlet, reported on March 13 that the Thai cabinet had granted investment token holders tax exemptions. Individuals who earned a profit from holding investment tokens and deducted 15% withholding tax could deduct this income when calculating their income tax, according to the report by Kulaya Tantitemit, director-general of Thailand’s revenue department.
The purpose of the tax measures, which go into effect on January 1, according to Tantitemit, is to encourage the use of investment tokens for fundraising and position the nation as an investment destination. The government official thinks this action will stimulate regional employment and investment, bolstering the economy.
Nevertheless, despite the approval of the tax break, the stipulation that the ruling will solely affect those who refrain from pursuing deducted tax credits or seeking full or partial refunds of the tax will be applicable.
The Thai government also granted tax incentives to individuals and issuers of investment tokens. The Thai government declared the exemption of investment token issuers from corporate income tax and value-added tax (VAT) on March 7.
According to Deputy Government Spokesman Rachada Dhnadirek, this would provide companies with an additional avenue for raising capital, such as investment currencies, beyond the scope of conventional fundraising. According to the official, the government anticipates investment tokens will generate approximately $3.7 billion in capital over the next two years.
Cryptocurrency taxation in Thailand has presented regulators with a turbulent voyage. Thailand levied a 15% capital gains tax on cryptocurrency merchants conducting business within the nation in January 2022. The government advised investors to compute and disclose their cryptocurrency earnings on tax returns to prevent penalties.
Nevertheless, the implementation of the capital gains tax encountered significant public disapproval. Thailand suspended implementing the 15% capital gains tax on February 1, 2022, in response to traders’ significant opposition to the measure.
A month later, the nation relaxed tax regulations by amending its tax policy to permit exemptions. The country implemented a new tax policy on March 8, 2022, which exempted cryptocurrency merchants on authorized exchanges from a 7% VAT.
