Thailand Gives Green Light to Tax-Free Earnings from Tokens

The Thai government has given its approval for tax incentives to be provided to individuals who hold investment tokens, with the aim of encouraging the use of these tokens for fundraising purposes.
According to a report by the Bangkok Post on March 13, Thailand’s cabinet has agreed to grant tax breaks to investment token holders. The Director-General of Thailand’s Revenue Department, Kulaya Tantitemit, stated that individuals who earn profits from holding investment tokens and have 15% withholding tax deducted can exclude this income when calculating their personal income tax.
Tantitemit explained that the tax measures, which came into effect on January 1, are intended to promote fundraising through investment tokens and establish Thailand as a hub for investment. The government official believes that this move will have a positive impact on investment and employment in the region, thereby boosting the country’s economy.
However, it should be noted that the tax break will only apply to individuals who do not request full or partial refunds of the deducted tax, or claim a deducted tax credit.
In addition to the benefits for individuals, the Thai government has also introduced tax incentives for investment token issuers. On March 7, the government announced that corporate income tax and value-added tax (VAT) would be waived for these issuers.
Deputy Government Spokesman Rachada Dhnadirek explained that this move will provide firms with an alternative method of fundraising, in addition to traditional methods. The government expects that investment tokens will attract approximately $3.7 billion in capital over the next two years.
It is worth noting that Thailand has faced challenges in regulating crypto taxation. In January 2022, the country introduced a 15% capital gains tax for crypto traders operating within its borders. At the time, the government encouraged investors to declare and report their crypto income in tax filings to avoid penalties.
However, this decision was met with strong opposition from traders, leading Thailand to suspend the implementation of the capital gains tax on February 1, 2022.
The country then revised its tax policy to allow exemptions for authorized exchange traders, exempting them from a 7% VAT on crypto transactions as of March 8, 2022.