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VAT exemption in Thailand
for cryptocurrency and digital token trading in Thailand
14/06/2022
The transfer of cryptocurrencies or digital tokens via a registered exchange in Thailand are now exempt from VAT (7%). This new legislation has been retroactively enforced from April 1st 2022, and will last until December 31st 2023.
This exemption was formally enacted by the publication of two royal decrees in the government gazette on May 24, 2022, and came into effect on May 25, 2022.
The relevant decrees are as follows:
- The Royal Decree issued under the Revenue Code Re: VAT exemption (No. 744) B.E. 2565 (2022), which states that the trading of cryptocurrencies or digital tokens on authorized digital asset exchanges will be exempt from VAT payment; and
- The Royal Decree issued under the Revenue Code Re: VAT exemption (No. 745) B.E. 2565 (2022) which states that trading in Thailand’s retail central bank digital currency (“CBDC”) issued by the Bank of Thailand will also be exempt from VAT payment obligations.
Why has Thailand introduced this exemption?
By offering this VAT exemption on Thailand, the Thai Government hopes to promote and increase trade in cryptocurrencies or digital tokens through Thailand’s approved exchanges. The use of exchanges registered in Thailand, as opposed to say Binance (which is not registered in Thailand) will allow the proper regulation of digital asset transactions.
Furthermore, this VAT exemption in Thailand has also been extended to include trade in the Retail Central Bank Digital Currency (CBDC), issued by the Bank of Thailand. This exemption will be in place for the same period, until December 2023.
Thailand’s Central Bank stated in December 2021 that the proposed Central Bank Digital Currency (CBDC) would be made available for testing to the public in late 2022. The CBDC has been proposed as an alternative payment option, involving transactions such as deposits, withdrawals and fund transfers by financial institutions and users.
What does this mean for Cryptocurrency in Thailand?
The cryptocurrency market in Thailand has experienced steady growth over the past few years. However, earlier in the year, the Bank of Thailand and the Securities and Exchange Commission (SEC) banned regulated digital assets operators from using their digital assets as a means of payment for goods or services.
The reason for this ban was to help with the prevention of cybercrime, data leaks, money laundering, threats to financial stability and the national economy.
This new latest incentive aims to promote and encourage the growth of the digital asset industry in Thailand, and hopefully increase Thailand’s competitiveness in the global market.
In light of the exemption, traders and investors will enjoy tax benefits from the margins of capital gains and capital losses resulting from crypto trading.
Since Thailand aims to position itself as one of the top options for offshore digital asset investors, this new tax policy could potentially provide the necessary boost to further develop and improve the Digital Assets infrastructure in Thailand.
Which exchanges have been registered in Thailand?
The list of exchange platforms registered in Thailand which can take advantage of the VAT exemption are as follows:
Licences have also been grated to the following platforms, SCBS and TDX, however, they have not commenced operations relating to digital assets at the time of writing.
How Belaws can help?
The Belaws blockchain and cryptocurrency tax service provides reliable advice and feedback relating to blockchain and crypto tax best practices in Thailand to ensure our clients are in full compliance with the current legislation at all times.
For more information relating to the Blockchain in Thailand, please feel free to book a consultation with one of our experts.
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
Is cryptocurrency legal in Thailand?
Yes Cryptocurrency is legal in Thailand. The Thai Government has been enacting and releasing legislation which is designed to create a legal framework for Cryptocurrencies in Thailand.
Is Binance legal in Thailand?
Binance has not been issued with the required licence from Thailands Security and Exchange Commission.
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