Thailand abolishes VAT on crypto trading to boost digital asset industry
Thailand has taken a bold step to encourage the growth of its digital asset sector by scrapping the value-added tax (VAT) on crypto trading. The move, which was announced by the Ministry of Finance on Tuesday, will take effect from January 1, 2024 and will apply to all types of digital assets, including cryptocurrencies, tokens, and non-fungible tokens (NFTs).
The decision was made to align with the government’s vision of making Thailand a digital asset hub in the region and the world, according to Paopoom Rojanasakul, secretary to the finance minister. He said that the VAT exemption would reduce the tax burden on investors and traders, as well as attract more foreign capital and innovation to the country’s digital asset ecosystem.
Currently, Thailand imposes a 7% VAT on crypto trading, in addition to a 15% withholding tax on capital gains and income. The VAT exemption will only apply to the trading of digital assets on licensed platforms, and not to the use of digital assets as a means of payment for goods and services, which will still be subject to VAT.
The announcement was welcomed by the Thai crypto industry, which has seen a surge in activity and interest in recent years. According to the Securities and Exchange Commission (SEC), the regulator of the digital asset market, there are currently six licensed crypto exchanges, two licensed digital asset brokers, one licensed digital asset dealer, and three licensed ICO portals in Thailand. The SEC also reported that the trading volume of digital assets in Thailand increased by 588% from 2020 to 2021, reaching 1.44 trillion baht ($43.5 billion) as of November 2021.
The VAT exemption is expected to further boost the confidence and participation of both retail and institutional investors in the Thai digital asset market, as well as foster the development of new and innovative digital asset products and services. Thailand is also planning to launch a central bank digital currency (CBDC) in the near future, which will complement the existing digital asset landscape.
Thailand’s move to abolish VAT on crypto trading follows the example of other countries that have adopted similar measures, such as Singapore, Switzerland, Germany, and France. These countries have recognized the potential and benefits of digital assets for their economies and societies, and have created favorable regulatory and tax environments for their growth. Thailand hopes to join them as a leader and pioneer in the global digital asset industry.
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