TFA, crypto companies to meet with officials

Digital asset tax rates high on the agenda

The Thai Fintech Association (TFA) and cryptocurrency businesses will meet with financial authorities to discuss tax measures in the digital asset decree, aiming to address fears that stringent taxes will compel these businesses to flee overseas to raise funds.

The TFA and the businesses plan to have a meeting with the Finance Ministry and the Revenue Department to discuss how current tax rates imposed on benefits derived from digital asset trades are not conducive to Thailand’s cryptocurrency sector and to blockchain technology as a whole.

TFA chairman Korn Chatikavanij said the recent law to regulate digital assets in Thailand fails to support business growth because of the tax impediment.

The TFA and cryptocurrency businesses will provide more information regarding digital asset transactions to these state agencies, said Mr Korn, a former finance minister.

“If the Revenue Department wants to collect taxes from the current tax rates, we can say that the government’s policy will fail because such collection will not come to fruition, as this type of business will move to other countries,” he said. “But if the tax measures are designed to halt the growth of cryptocurrencies and blockchain, then this might work.”

According to the amended Revenue Code, effective since May 14, individuals who gain and receive benefits from putting money into digital assets are subject to a 15% withholding tax.

But the Finance Ministry will waive the 7% value-added tax (VAT) for retail investors who trade cryptocurrencies and digital tokens through digital exchanges.

The ministry will issue ministerial regulations to impose a 15% withholding tax on capital gains and benefits from digital asset transactions for corporate entities.

Firms that make digital-asset-related trades will be liable for a 7% VAT payment from the transaction value, on top of the 15% withholding tax.

Despite discord over the tax measures, the Securities and Exchange Commission, as the designated regulator supervising digital assets, has taken an understanding approach to the business after studying the trend for a year, Mr Korn said.

“We still have a positive outlook for cryptocurrencies and crypto assets related to the blockchain business,” he said. “They will have greater importance for future trading and will grow very quickly.

“If Thailand rejects this because of a lack of understanding, other countries in the region are now preparing to take this opportunity instead. We will eventually lose on competing for a regional [fund-raising] centre.”

Improper tax measures for digital assets can still be waived or changed because it’s not too late to do so, Mr Korn said.

The trend of accepting cryptocurrencies will increase and they could become fiat money in the future, therefore Thailand should be well prepared, said Nintita Loetruangsuphakun, chief strategy officer of ICORA, a company involved with structuring digital token sales campaigns and assessing regulatory risks.

“We are all in the learning curve because crypto assets are the new wave for all countries, so we have to learn it all together,” Ms Nintita said.