Baisakhi MishraThailand’s crypto tax regulations have become more lenient since the previous exposition. By using government-approved exchanges, crypto dealers can save 7% on their taxes. Long-term investors in start-ups will also receive tax benefits.
Exemption from taxation for cryptocurrency traders
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Thailand’s finance ministry is said to have loosened crypto tax restrictions in order to encourage investment in the digital asset industry.
The tax revisions come just a few weeks after the government shelved its initial intentions to impose a 15 percent tax on cryptocurrency gains. According to Reuters, the new tax policy exempts crypto traders from the 7 percent value-added tax (VAT) on regulated exchanges.
Traders would also be able to balance their annual losses against gains from their crypto investments under the new tax regime. This is a huge relief for traders, as most governments are only concerned with taxing gains at this moment, ignoring the losses sustained by traders as a result of crypto market volatility. The new tax breaks would be phased in overtime.
According to Reuters, Thailand’s finance ministry has decided to relax tax restrictions for crypto investors and traders. The Thai finance cabinet announced that, in response to an increase in crypto trading, it has decided to create measures to encourage investment in digital assets.
This comes after the ministry recently dropped the 15 percent tax rate in response to public outcry. When trading on government-authorized exchanges, crypto traders would be exempt from the 7% value-added tax (VAT), according to Finance Minister Arkhom Termpittayapaisith.
Crypto traders will now be able to deduct annual losses from gains when filing taxes on cryptocurrency assets, which includes trading of their retail central bank digital currency. From April 2022 until December 2023, the new tax exemption will be in force.
Thailand, the second-largest economy in Southeast Asia, has roughly 10 times the number of active trading accounts as the United States. According to data from the country’s Securities and Exchange Commission, transaction volume increased by about 600 percent from November 2020 to April 2021. (SEC).
Investors are now subject to new laws
The ministry has granted tax benefits for both direct and indirect investments in start-ups, in addition to crypto traders. Investors who invest for at least two years in start-ups in the country will be eligible for a 10-year tax exemption that will last until June 2032.
This is a significant reversal from less than a year ago when four different types of tokens and non-fungible tokens (NFTs) were banned. However, when contrasted to other countries’ non-existent or suffocating regulations, it appears to be fairly advanced and could serve as a model for others.
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