Thailand offers tax breaks for investment token issuers

The government of Thailand expects the offering of investment tokens to raise more than $3.7 billion in the next 2 years.

Tax-free issuance of investment tokens

The government of Thailand aims to leverage the growth of the digital asset sector by allowing tax-free issuance of digital tokens for investment.

Thailand’s cabinet has agreed to abolish corporate and value-added tax (VAT) for companies issuing investment tokens.

On March 7, the deputy government spokesperson Rachada Dhnadirek announced that companies will have access to alternative methods of raising capital through investment tokens.

According to Rachada, the government expects the offering of investment tokens to generate 128 billion Thai baht ($3.7 billion) over the next two years. The state has estimated the potential loss of tax revenue at 35 billion baht ($1 million).

Thailand has taken several measures to clarify local tax rules related to crypto. Initially, the authorities proposed introducing a 15% capital gains tax for investors in early 2022. However, the government subsequently scrapped its plans and exempted crypto traders from the 7% VAT on authorized exchanges a few months later.

Regulations in Thailand

Last year, local regulators worked on broader crypto regulations. In March 2022, Thailand’s Securities and Exchange Commission (SEC) banned the use of cryptocurrencies for payments.

As the Thai SEC continues to work towards stricter crypto regulations to protect investors, it was reported in January 2023 that the financial regulator had introduced new rules for crypto custody services. Under the new rules, all crypto custodians must have a contingency plan in case of unforeseen events.

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