Following the considerable growth in the size and value of Thailand’s digital asset market in 2021, the country plans to implement a 15% capital gains tax on profits from cryptocurrency trading.
In 2022, all taxpayers who benefit from cryptocurrencies, including investors and mining operators, will be liable to a 15% withholding tax, although digital asset exchanges would be excluded from such obligations, according to a report published on January 6 by The Bangkok Post, citing an anonymous source inside the Finance Ministry.
The Revenue Department wants to strengthen its supervision of cryptocurrency trading this year. Section 40 of the Royal Decree modifying Revenue Code No.19 indicates the department has the right to collect taxes from cryptocurrency traders since the proceeds from such activity might be regarded as assessable income under the law.
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Legal penalties
The ministry recommends that investors identify their cryptocurrency income while paying their taxes this year in order to avoid legal penalties as profits from trading.
Several uncertainties remain, according to co-founder and chief executive officer of Zipmex Thailand, Akalarp Yimwilai, concerning how to assess earnings, including whether a gain from a price rise as the US dollar increases is deemed a profit.
“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,” said Akalarp.
He added:
“As an exchange provider, Zipmex has been working to develop a system to help our customers calculate profits and losses, but it’s very difficult. If the Revenue Department really has such an advanced data analytics system that it can precisely calculate gains from cryptocurrencies, it would be a great benefit to share it with the industry.”
BoT against crypto trading
In December, the Bank of Thailand (BoT) urged Thai banks to avoid direct involvement in cryptocurrency trading, noting the volatile nature of the market.
As per the BoT’s senior director Chayawadee Chai-Anant, banks cannot fully cushion customers due to risks involved in the crypto sector.
“We don’t want banks to be directly involved in digital asset trading because banks are (responsible) for customer deposits and the public, and there is a risk. If a company is a shareholder, that is another issue,” said Chai-Anant.
Meanwhile, just last week, Jasmine Technology Solution, a Thai technology business, saw a surge in its stock price after extending its services to include cryptocurrency mining.
At the time of our report, the stock had surged 6,700% year to date after entering the crypto mining business in July with 335 devices. Notably, the firm will be subject to the latest capital gains tax as a mining operator.
