Thailand’s finance ministry has imposed a 15% capital gain tax on the profits made by taxpayers of the country from trading cryptocurrencies.
According to the Bangkok Post, all taxpayers who gained from cryptocurrencies starting this year will be subjected to a 15% withholding tax. The revenue department has said that there will be an increase in surveillance and recommended that investors identify their income and file their taxes. As per the new crypto tax policies, if any retail investor or mining operator fails to pay taxes, they have to bear legal penalties. However, cryptocurrency exchanges have been exempted from the tax.
Crypto Rules To Check Surge
The new regulations come on the heels after Thailand witnessed a surge in crypto-related activities and a significant growth in the market size of digital assets in the past year. For instance, earlier in August 2021, the Zipmex crypto exchange raised $1.3 billion in funding from Thailand’s fifth-largest lender, the Bank of Ayudhya. Later in November, Thailand’s oldest bank called the Siam Commercial Bank (SCB) acquired a majority 51 percent stake in Bangkok-based cryptocurrency exchange BitKub.
Last year the Bank of Thailand (BoT), the central bank of the country, said that it does not want commercial banks to be directly involved in crypto trading. As per reports, the central bank had already started working jointly with the country’s Finance Ministry and Securities and Exchange Commission last year to lay down rules regarding crypto trading. These regulations would help minimize risks related to the use of cryptos for payments in the economy.
How Will The Tax Be Calculated?
According to Section 40 of the Royal Decree amending Revenue Code No.19., the government has the authority to collect taxes from cryptocurrency trading as profits from such activity can be considered assessable income. When a seller is subjected to withholding tax, the profits from crypto transfers must also be filed for annual income tax returns, as such withholding is not considered a final withholding tax.
Akalarp Yimwilai, co-founder and chief executive of Zipmex Thailand, raised some serious questions regarding the new crypto laws as to how to calculate the profits. Whether again from a price increase as the US dollar strengthens is considered a profit. He went on to add,
“Tax methods and calculations should be more concise, clear, and easy to understand. Many people I know want to pay taxes, but don’t know how to calculate them,”
Additionally, the report also stated that the Southeast Asian country is seeking to recover its lost revenue due to the ongoing pandemic from tourism by attracting the world’s crypto traders.