- Thailand’s Cabinet has approved relaxed tax rules for Bitcoin investments.
- The tax relief includes a 7% Value Added Tax (VAT) and loss clawback mechanisms for cryptocurrency taxes.
- Direct and indirect investments in startups will also benefit from tax relief for ten years if two or more years are invested in the startup.
Thailand’s cabinet on Tuesday eased tax regulations for investments in Bitcoin and other cryptocurrencies to fully develop Southeast Asia’s second-growing economy, according to an official press release.
A 7% VAT for authorized exchanges, as well as the possibility of compensating its annual losses for taxes due to bitcoin and other cryptocurrencies, are intended to encourage other trading and investment strategies in the fast growing economy.
“This issue will allow Thai investors to trade digital assets on a reliable Thai exchange,” Finance Minister Arkhom Termpittayapaisith said, according to a translated version of the statement. “Because it is under the supervision of the SEC and other related government agencies, it enables Thailand to have a future payment infrastructure ready for the digital economy.”
The tax exemptions under this initiative will be effective from April 2022 to December 2023 and will include the upcoming Central Bank Digital Currency (CBDC) that Thailand intends to offer, the minister said.
Direct and indirect investments in startups will also be eligible for tax breaks, as investors who invest for at least two years in a startup will be offered tax breaks for 10 years, until June 2032, Termpittayapaisith said.
“This will help Thai startups raise more capital from investors and boost domestic investment. This will allow the economy to develop sustainably and improve the country’s competitiveness,” he said.
Termpittayapaisith explained that digital asset trading relief will “help investors in digital assets be comfortable performing their legal duties and become fairer by paying more taxes.” He went on to explain the benefits of this relief, including “helping investors to trade digital assets that take place on Thai exchanges to be reliable, safe, and empowering people to use cryptocurrencies at the future”.