Thailand has scrapped plans to impose a 15 per cent withholding tax on crypto transactions after facing pushback from traders in one of south-east Asia’s biggest markets for digital currencies. Tax officials in the country said on Monday that people who earned income from cryptocurrency trading or mining could report these as capital gains on their income taxes.
The new rules, outlined in a manual published by Thailand’s revenue department, will also allow traders to offset their annual losses against gains made in the same year, meeting demands from those in the nascent industry who had warned that excessive tax would kill off a sector in its infancy. Trading of bitcoin and other online currencies has expanded rapidly in Thailand during the coronavirus pandemic, which has hit the country hard in traditional industries including tourism — an area that generated about a fifth of GDP before the closure of the border to most international travel in 2020. Crypto industry participants welcomed Monday’s announcement.
“The revenue department did a lot of homework and reached out to crypto operators as well to get feedback,” said Pete Peeradej Tanruangporn, chief executive of Upbit, a crypto exchange, and co-chair of the Thailand Digital Asset Operators Trade Association. “It is much more friendly to both investors and the industry.” In a country that suffered a devastating currency and financial crisis linked to “hot money” flows in 1997-98, Thai regulators have been cautious in their approach to regulating crypto.