– Thailand’s Finance Ministry exempts value-added tax (VAT) on digital asset trading to position the country as a leading digital asset hub
– VAT exemption on income from cryptocurrency and digital token trading effective since January 1, 2024, with no expiration date
– Transfer of digital investment tokens to a third party exempt from VAT since May 14, 2023
– Focus on amending the 2019 Securities and Exchange Act to regulate digital investment tokens as securities
– Thai SEC eases investment restrictions for retail investors on real estate-backed ICOs and infra-backed ICOs
– Custodial wallet provider businesses in Thailand now able to offer services to digital asset business operators
– SEC of Thailand refuses trading of spot Bitcoin exchange-traded funds (ETFs) despite US approval
The Finance Ministry of Thailand has announced the exemption of value-added tax (VAT) on digital asset trading in an effort to position Thailand as a leading digital asset hub. The decision aims to promote digital assets as an alternative tool for fundraising and drive the growth of the digital asset industry in the country.
II. VAT Exemption
The ministry has suspended the requirement to pay 7% VAT on income derived from cryptocurrency and digital token trading, effective since January 1, 2024, with no expiration date. This incentive is expected to boost investment and trading in the digital asset space. The exemption, previously limited to authorized digital asset exchanges, has now been extended to brokers and dealers under the supervision of the Securities and Exchange Commission (SEC).
III. Regulatory Amendments
To solidify Thailand’s position as a digital asset hub, the Finance Ministry and SEC are in the process of amending the 2019 Securities and Exchange Act. These amendments will enable digital investment tokens to resemble securities, fostering a more regulated and secure environment for investors. The SEC has also updated the criteria for investing in digital tokens, easing some restrictions and improving investment criteria and related criteria for digital asset business operations.
IV. Impact and Future Prospects
Thailand has emerged as one of the top jurisdictions for offshore digital asset investors, and these new tax policies and regulatory amendments are expected to provide a significant boost to the country’s digital asset market. However, the government also emphasizes the need to consider the stability of the financial system while harnessing the potential of digital assets. The SEC of Thailand has made it clear that it will not allow the trading of spot Bitcoin exchange-traded funds (ETFs) in the country despite the approval of Bitcoin ETFs in the United States.
The VAT exemption on digital asset trading, along with regulatory amendments and easing of investment restrictions by the SEC, signals a significant shift in Thailand’s approach to digital assets. These measures are aimed at promoting investment, ensuring investor protection, and positioning Thailand as a leading digital asset hub while also considering the stability of the financial system.
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