Thailand Waives Taxes on Investment Tokens

Thailand's government is taking further steps to benefit from the growth of the digital asset industry by waiving taxes on investment tokens. According to Reuters, Thailand's cabinet has agreed to exempt companies that issue investment tokens from corporate income tax and value-added tax (VAT). This move is expected to encourage companies to access alternative ways of raising capital in addition to conventional methods like debentures.

Deputy government spokesman Rachada Dhnadirek announced the news on March 7, stating that the government expects investment token offerings to generate 128 billion Thai baht ($3.7 billion) over the next two years. However, the state estimated potential losses of tax revenues at 35 billion baht ($1 million).

Thailand has been taking several steps to clarify local crypto-related taxation rules. In early 2022, authorities suggested adopting a 15% capital gains tax for investors, but the government subsequently scrapped the plans and exempted crypto traders from the 7% VAT on authorized exchanges a few months later.

Local regulators were also working to implement wider crypto regulations last year. In March 2022, Thailand's Securities and Exchange Commission banned the use of cryptocurrencies for payments. The Thai SEC is also continuing to work on stricter crypto regulations to protect investors. In January 2023, the financial regulator introduced new rules for crypto custody services, requiring all crypto custodians to have a contingency plan in case of unforeseen events.

Thailand's tax waiver on investment tokens is a significant move that could help drive growth in the country's digital asset industry. It will provide companies with an alternative means of raising capital and encourage further investment in the sector. Additionally, this move may attract more foreign investment to Thailand's digital asset industry, as investors seek out countries with favorable regulatory and tax environments.

The tax waiver is just one of several steps taken by the Thai government to support the development of its digital asset industry. As the sector continues to grow, it is likely that more initiatives will be introduced to help drive its expansion.