According to the Thai Securities and Exchange Commission (SEC), investors had opened only 170,000 accounts with an exchange or digital asset trading center licensed by the SEC by 2020. Still, this number grew to 1.8 million by the end of 2021.
The value of investors' digital assets in Thailand has risen from THB9,600 billion to THB114.539 billion. This calculation does not include those investors who open trading accounts with foreign exchanges unregulated by the Thai SEC.
According to Thai law, cryptocurrencies are currently considered digital assets. On 25 January 2022, the SEC, the Bank of Thailand (BOT), and the Ministry of Finance (MoF) confirmed the need to regulate and control the use of cryptocurrencies as a means of exchange.
Moreover, under Thai law, all transactions using digital assets is subject to value-added tax (VAT). Profits from trading digital assets is subject to capital gains. To clarify itself, the Thai Revenue Department issued a press release on 28 January 2022, establishing the following:
- Net profits from trading cryptocurrencies must include net gains from trading digital assets.
- Trading in cryptocurrency is allowed only via an exchange regulated by the SEC. In other words, all platforms must register with the SEC, and such platforms shall have to comply with regulations to track capital gains from trades. Further, SEC-regulated venues must comply with various consumer protection and reporting requirements as with other companies overseen by the SEC;
- Trades executed via an SEC-regulated exchange are exempt from withholding tax. However, if a platform is a non-SEC-regulated exchange, withholding, income, and VAT taxes apply;
- transactions made through business operators or exchanges regulated by the SEC and digital assets are exempt from VAT; and
- there may be amendments to the Revenue Code in the future.
The Revenue Department will consider suitability and context accordingly in its regulation of cryptocurrencies, like other national governments.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.