Thailand Readies Itself For Digital Economy, Removes Crypto Transfers From VAT Till End Of 2023
the Royal Thailand Government Gazette has legally established a VAT exemption for crypto transfers lasting until the end of 2023.
In March, the cabinet granted an exemption from the value added tax (VAT) for exchanging cryptocurrency or digital tokens. The decision was enacted into Thai law yesterday and will be in force until December 31, 2023.
Thailand Royal Decree Gives Tax Break For Crypto Transactions
According to Royal Decrees published on the Royal Gazette website on Tuesday, the transfer of cryptocurrencies or digital tokens at digital asset exchanges under the laws has been exempted from VAT collection. Also, VAT has been removed from the transfer of digital currency created by BOT for public use.
The government approved the policy in March, and it applies to trading platforms that are registered with the Ministry of Finance. The decision is now part of Thai law, as it takes effect the day after it is published in the official journal.
The major goal of the tax exemption, according to the document, is to promote cryptocurrency trading on recognized exchanges, allowing crypto transactions to be controlled and monitored by appropriate authorities such as the Securities and Exchange Commission (SEC).
Related reading | Thailand Has Just Axed The 15% Tax On Crypto
Thai’s Finance Minister, Arkom Termpittayapaisit, is certain that the country’s cryptocurrency exchange would become more dependable and stable as tax restrictions are relaxed. He’s also been quoted as saying:
“This would encourage Thailand to have an infrastructure and payment system that would be ready for the future digital economy.”
Ekniti Nititthanprapas, Director-General of the Revenue Department, noted that the reduced requirements would make purchasing and selling digital assets in the country more convenient. Thailand would gain a “good image” in the global digital economy, and investors would receive a reasonable tax payment and secure transaction.
Total crypto market cap stands at $1.2 Trillion. Source: TradingView
Another royal decree, also announced on May 24, extends the VAT exemption to transfers using Thailand’s monetary authority’s retail central bank digital currency (CBDC).
The Bank of Thailand said in December that it plans to begin testing the CBDC as an alternative payment method in late 2022 in transactions between financial institutions and customers. The retail CBDC initiative of the Bank of Thailand is set to begin pilot testing later this year.
Following popular outcry, Thailand’s government scrapped 15% withholding tax plans on crypto transactions earlier this year.
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Featured image by Shutterstock and chart from Tradingview.com