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The Government of the Kingdom of Thailand will provide value-added tax exemptions for transactions with digital assets until December 31, 2023.
Thai lawmakers made a proposal in March, but it was approved by the authorities only on May 24. According to the royal decree, operations with cryptocurrencies and tokens will be exempt from paying value added tax on trading platforms registered by the Ministry of Finance. The main goal of the initiative is to facilitate the trading of cryptocurrencies on regulated exchanges so that authorized bodies, including the Securities and Exchange Commission of Thailand (SEC), can monitor and track transactions with crypto assets.
Thai Finance Minister Arkom Termpittayapaisit (Arkom Termpittayapaisit) is confident that tax breaks will encourage cryptocurrency exchanges to come out of the shadows and operate legally. This will prepare the country’s payment infrastructure for the transition to the digital economy. The head of the Department of Income of Thailand Ekniti Nititthanprapas (Ekniti Nititthanprapas) believes that the exemption of cryptocurrency transactions from VAT will make the purchase and sale of digital assets more convenient. The authorities intend to create an image of Thailand as a jurisdiction favorable to crypto assets in order to attract even more investors.
Vat and transactions using the Central Bank of Thailand’s (CBDC) digital currency will be exempt. In December, the Central Bank said it plans to begin testing the digital Thai baht in 2022. Local financial institutions and their customers will participate in the audit. Since the beginning of the year, the government has introduced a 15% capital gains tax for private traders for all operations with cryptocurrencies. However, later the tax was canceled due to numerous protests of market participants.
Thailand’s SEC is very wary of cryptocurrencies. In March, the agency warned of a ban on the use of digital currencies to make payments due to the threat of money laundering.
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