One of Asia’s Largest Economies Enforces New, More Liberal Cryptocurrency Taxation Rules
Thailand’s cabinet has decided to relax cryptocurrency taxation laws to boost and develop an industry that is growing into the second-largest economy in Southeast Asia, Reuters reports.
The recently announced new rules are going to allow traders to offset the annual loss against profit, which can be considered a generous decision in favor of traders as most of the market participants are trading at loss rather than profit.
As the finance minister explained in a press conference, the total value-added tax for cryptocurrency trading will be 7%. He added that the tax exemption will be effective from April 2022 to December 2023, which will also cover trading of CBDCs, which have not yet been issued by the central bank.
The digital industry and cryptocurrencies have grown rapidly in Thailand over the past year, when the market capitalization tripled to reach a trillion in November. The number of trading accounts on officially regulated exchanges reached nearly two million at the end of 2021 – up from 170,000 in that year.
Like any other part of the world, bitcoin remains the most popular cryptocurrency in the country.
old taxation system
Earlier, sources in the Ministry of Finance of Thailand said that all those who profit from cryptocurrency trading will have to pay a 15% profit tax from selling digital currencies. The ministry has recommended that market participants mark their income from cryptocurrencies separately in 2022.
Several industry representatives said that it is extremely complicated to properly record cryptocurrency trading earnings as most cryptocurrency trading pairs are pegged to the United States dollar, rather than THB, which often fluctuates against the US currency.