Headline: What is Thailand doing to encourage cryptocurrency firms
Body:
Headline: What is Thailand doing to encourage cryptocurrency firms
Body: Say the word Thailand and so many images come to mind. Some are images of verdant jungle, some lazy rivers, some are images of fishing. Recently, this pastoral picture of Thailand has been transforming substantially. One avenue of change is the opinion of Thailand’s government concerning cryptocurrency. To be frank, they have been doing quite a bit to attract cryptocurrency firms to their fair shores.
How is crypto used in Thailand?
Ok. There are important nuances here I want to point out. In El Salvador, bitcoin is accepted as legal tender, status shared with USD in that country. On one hand, it is possible to purchase cryptocurrency here. On the other hand, it would appear that the menu of cryptocurrency options a person has is rather limited. Despite this reality, the NFT market within Thailand is very very strong.
What is the government’s attitude/approach?
We have to talk about a really boring… I mean…. Fascinating thing. Value Added Taxation (VAT) is something we don’t have in the US. Very basically, say that peanuts are brought into Thailand. These are then processed into peanut butter. This processing represents extra value, and the seller is taxed on this extra value. This is the basis of the VAT. Even though Thailand only allows a limited number of currencies to be traded, the government deemed that VAT would not be applied to the trading of digital assets. This move has been very attractive to all people even thinking of investing in cryptocurrency. Even more attractive, Thailand has exempted some token income from all personal income taxes too. In fact, on March 13, a local media outlet, the Bangkok Post, reported that Thailand’s cabinet had approved the tax breaks for investment tokenholders. In the report, the Director-General of Thailand’s Revenue Department, Kulaya Tantitemit, said that individuals who made a profit from holding investment tokens and had a 15% withholding tax deducted could exclude this income when calculating their personal income tax.
In other news, the crypto company Binance has been granted a charter by Thai government to do business within the country. Just recently Binance opened BinanceTH with a partner. This will grant Thai citizens full rights to a cryptocurrency exchange. Binance and others will be required to disclose all risks to potential investors. When they don’t follow thru on their responsibilities, the Thai SEC will act aggressively and could shut them down. Despite this harsh administration, Bitkub, a public cryptocurrency exchange plans to have an IPO soon.
The Verdict
Thailand seems to have a very similar dilemma as the U.S. On one hand, they want to entice cryptocurrency firms to their country, to do business. This will lead to more people visiting their country, more restaurants supported, more hotel occupancy, etc. On the other hand, they also want the country to benefit optimally from these new businesses. In general, this translates to taxing these firms in such a way that they are not scared into the arms of a neighboring country. It might take some trial and error, but they are trying.
REFERENCES
Three Reasons Why Crypto Is Growing in Thailand (cryptoforinnovation.org)
Thailand’s biggest crypto exchange goes on hiring spree ahead of IPO (cointelegraph.com)
Thailand approves personal income tax exemption for token earnings (cointelegraph.com)
Editor’s Note: Please note that the information contained herein is meant only for general education: This should not be construed as Tax Advice. Personal attributes could make a material difference in the advice given, so, before taking action, please consult your tax advisor