Thailand’s regulatory authority has decided to levy a 15 percent capital gains tax on all cryptocurrency profits, following the considerable growth in the size and value of the country’s digital asset market in 2021.
With this latest development, all taxpayers who benefit from cryptocurrencies, including investors and mining operators, will be liable to a 15% withholding tax, citing an anonymous source within the Finance Ministry, Bangkok Post reported. However, crypto exchanges have been exempted from the capital gains tax.
Strengthening supervision on the crypto market
The Revenue Department seeks to strengthen its supervision over the growing local cryptocurrency trading. Notably, the Thai Revenue Department can consider profits from cryptocurrency traders as taxable income under Section 40 of the Royal Decree modifying Revenue Code No.19. A capital gains tax is a tax on the profit realized on the sale of a non-inventory asset.
Although, it is not clear if the capital gains will be levied only after the digital currencies were converted to Thai baht or other stable coins as well.
Meanwhile, to avoid legal penalties as profits from trading, the ministry suggests that investors identify their crypto income while paying their taxes in 2022.
BoT against cryptocurrencies trading
In December 2021, the Bank of Thailand (BoT) had urged Thai banks to avoid direct involvement in cryptocurrency trading, citing the volatile nature of the market.
“We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public, and there is a risk. If a company is a shareholder, that is another issue,” said BoT’s senior director Chayawadee Chai-Anan.
As per the report, an estimated 100,000 Thai citizens are associated with the crypto mining sector.
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