Thailand‘s regulatory attitude on cryptocurrency is becoming more aggressive, with the most recent action being the imposition of a capital gains tax on crypto dealers in the Kingdom.
According to the Thai Finance Ministry, profits from cryptocurrency trading will now be subject to a 15% capital gains tax.
The ministry advised those involved with cryptocurrencies to accurately report their incomes when filing taxes this year according to a Jan 6 report in the Bangkok Post. It was not specified if this would apply to unrealized gains.
According to the article, the new tax would apply to investors and mining operations, but crypto asset exchanges would be excluded. Some of Thailand’s main exchanges are linked to banks and rich businessmen.
In November, Thailand’s largest exchange, Bitkub, was bought in a 51 percent buyout by the country’s oldest bank, Siam Commercial Bank. Upbit Thailand is controlled by family members of the CP Group, the country’s largest food monopoly. In the meanwhile, Zipmex Thailand raised more than $40 million in August from the country’s fifth-largest lender, Bank of Ayudhya.
Following a jump in trade volume in 2021, the Thai Revenue Department intends to increase its oversight of the crypto market this year.
According to Akalarp Yimwilai, co-founder and CEO of Zipmex, calculating taxes is difficult, especially since exchange rates with USD must be considered. He said:
“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,”
It’s unclear if the taxes would be assessed on annual filings or if the government will require exchanges to deduct them at the source. The latter would surely put out the fires that have been stoking Thailand’s crypto trading frenzy for the last year.
The Kingdom’s tourist ministry is aiming to encourage the embryonic crypto business in order to attract large bag holders in order to revitalize the devastated tourism industry.
Those attempts, however, are being thwarted by the central bank and government, which obviously aims to crack down even more on crypto assets.
The Bank of Thailand said in December that it will be developing new regulations to govern crypto-related activity for people and corporations. This month, the central bank will issue a consultation document on the “financial landscape,” seeking agreement on what it refers to as “red lines” for crypto-related enterprises.
Commercial banks and small companies have been frequently cautioned by central bankers not to accept digital assets as payment.
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