- Thai lawmakers approved a tax exemption for companies issuing digital tokens for investment.
- The cabinet agreed to waive corporate tax for such companies and value-added tax for investors, Finance Minister Arkhom Termpittayapaisith said on Tuesday.
- The Thai government could lose about $1 billion in tax revenue from the move.
- The latest waiver complements the relaxed tax rules introduced by lawmakers in 2022.
Thailand’s government agreed to grant a tax exemption to companies that issue digital tokens intended for investment purposes, Reuters reported Tuesday, citing a statement from government officials.
Although the Thai SEC banned cryptocurrencies as a payment method, companies are still allowed to issue investment tokens under the law.
Finance Minister Arkhom Termpittayapaisith said the tax break will apply to both companies issuing these tokens and investors parking capital in these digital investment vehicles. For companies, Thailand waives corporate tax. These companies must register their tokens to qualify for the tax break, Minister Arkhom said.
Investors who deposit funds into these digital investment tokens are also exempt from paying value added tax.
Government spokesman Rachada Dhnadirek added that companies will have access to alternative channels to raise funding. These companies could secure capital through investment tokens, bonds and other methods of traditional financing, Rachada noted.
The tax break could cut off a huge revenue stream and cost the Thai government about 35 billion baht or $1 billion over the next two years. However, the move is also poised to spur a flurry of investment coin offerings worth more than 128 billion baht or $3.71 billion in the same 24-month period.
Thailand’s Crypto Regulatory Scene
The latest waiver complements the relaxed tax rules introduced by lawmakers in 2022. Thai officials have previously slashed VAT charges for crypto transactions and announced a VAT tax exemption for such transfers until 2024.
The Thai Securities and Exchange Commission (SEC) has also introduced a framework to oversee crypto custody companies.
The government has also introduced strict guidelines for crypto in some cases. Lawmakers banned crypto lending and staking in September 2022. Stricter advertising rules for crypto companies were announced in the same month.