The most awaited cryptocurrency tax framework in Thailand has finally been announced by the Country’s finance minister. The minister Apisak Tantivorawong reported to the cabinet that all cryptocurrency trades would be taxed at a rate of 7% VAT, and the returns will be taxed at 15% capital gains tax. The first draft was released on 14th March and the final draft on 30th march with all stating that tax on cryptocurrency gains will remain at 15%.
There has been a lot of uncertainty in Thailand regarding cryptocurrency regulation especially the regulation of ICOs something which led the Thai Digital Asset Exchange to stop ICO trading in February to give way for the Thailand Securities and Exchange Commission to formulate and release a regulatory framework. More to that the governor of the Central Bank of Thailand asked all the county’s banks not to trade or invest in digital currencies. The banks are also required not to participate in the creation of exchanges. The circular was however confined only to banks and not crypto exchanges or the other crypto platforms.
According to the minister, the new regulations are made to prevent money laundering, tax evasion among other criminal activities which have been reported in the crypto sector. According to the Chairman of the Thai Fintech Association Korn Chatikavanji: “we have to be very careful not to allow crypt conservation instincts to result in draconian regulations.”
This new regulations by Thailand are scaring away startups who are now looking for Singapore as an alternative location for their businesses. A good example is Six.network which held its ICO in Bangkok but has since been registered in Singapore due to the unfavorable business in both Thailand and South Korea. According to Nikkei Asian Review, Six.network is working with consulting the Thai SEC to clarify the operation which is meant to ensure transparency.
Another company J Ventures which had an ICO in February raising $21 million within 55 hours after selling all its 100 million tokens is facing a hard time. According to our news sources the coin’s future is now uncertain because according to the new regulations even already issued ICOs will be required to comply with all the future regulations within a six month period. This will make the launching of the coin very hard.