The Thai government said on Tuesday it will waive corporate and value-added tax for companies that issue digital tokens for investment. This marks another pro-crypto move from Thailand after easing crypto trading tax rules last year.
Thailand’s cabinet on March 7 agreed to offer tax breaks for companies issuing digital tokens for investment, Reuters reported. Deputy government spokeswoman Rachada Dhnadirek noted that these companies will raise capital through investment tokens, as well as alternative methods such as bonds.
Finance Minister Arkhom Termpittayapaisith said the exemption applies to both the primary and secondary markets for companies and registered entities issuing initial coin offerings. Investors will also be exempt from value added tax, but utility tokens will not be eligible for these tax benefits.
“The cabinet approves the exemption from corporate income tax and value added tax for companies issuing digital investment tokens to facilitate fundraising by listed and unlisted entities.”
The estimated investment token offering over the next two years is worth more than $3.71 billion. The move will cost the government to lose nearly $1 billion in tax revenue.
Growing landscape of digital tokens in Thailand
Thailand continues to witness growing cryptocurrency adoption in recent years after the country’s Securities Exchange Commission began regulating digital assets. The government also relaxed crypto trading tax rules last year to help the industry grow.
However, the Bank of Thailand and regulators have restricted certain crypto services in the country, such as the use of digital assets for payments. The central bank claims it is jeopardizing the country’s financial stability and the overall economy.
In addition, the Thai SEC recently issued regulations for crypto custody providers to securely manage clients’ assets. The government is also testing the central bank digital currency (CBDC), believing it can form the foundation of the future financial and banking system.
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