Thailand has removed a 7% value added tax (VAT) on cryptocurrency trading, but a 15% capital gains tax will be levied on profits generated from trading in the country while companies that conduct an initial coin offering (ICO) will still have to pay corporate taxes on funds raised.
New Thai cryptocurrency regulations came into effect on Monday after being published in the Thai Royal Gazette, including the 7% VAT and 15% capital gains, also called a withholding tax. A May 16 report from the Nation on claims that the public outcry resulting from the new regulations convinced the Thai Revenue Department to waive the VAT to “reduce the tax burden.”
Importantly, the cryptocurrency transaction VAT will only be waived “for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC).” The Thai SEC has issued a mandate for all companies engaged in cryptocurrency trading and ICOs to apply for a license with the regulator.
Thai SEC Secretary General, Rapee Sucharitakul, will hold a public hearing on Monday May 21 to gather information for upcoming ICO regulations. The hearing will be followed by a two-week consultation period before the complete regulations are unveiled in June.
Sucharitakul is particularly concerned about the lack of information about ICO investment, reportedly saying that the new ICO regulation “aims to provide protection for general investors, since only investors who have knowledge of ICO issuance or digital asset transactions should be allowed to engage in this kind of trading.”
According to regulators, the new approach will not ban ICOs, as some other Asian countries have opted to do, but regulate them instead.