Thailand's government has formally introduced a VAT exemption for cryptocurrency transfers made through government-approved exchanges.
The tax cut, which will last until the end of next year, will also apply to the Bank of Thailand's digital currency.
Investors who move cryptocurrencies and digital tokens through Thai exchanges will be eligible for a 7% VAT exemption on their trades. The tax break was enacted retroactively from April 1, 2022, according to a media outlet. According to local media, it will stay in effect till December 31, 2023.
The government approved the policy in March, and it applies to trading platforms that are registered with the Ministry of Finance. The judgment 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 report, is to promote cryptocurrency trading on recognized exchanges, allowing crypto operations to be monitored and supervised by appropriate authorities such as the Securities and Exchange Commission (SEC).
Thailand's Finance Minister, Arkom Termpittayapaisit, is certain that the country's cryptocurrency exchange would become more dependable and stable as a result of the reduced tax restrictions. He's also been quoted as saying:
“This would empower Thailand to develop infrastructure and payment systems that are ready for the digital economy of the future.”
Ekniti Nititthanprapas, Director-General of the Revenue Department, noted that crypto trading will be easier for traders, who will benefit from fair tax treatment and secure transactions, while Thailand's image in the global digital sector improves.
Another royal order, 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 additional payment method in late 2022 in exchanges between financial firms and customers. Thailand has seen a substantial increase in cryptocurrency investment and trade in recent years. The country's financial authorities took efforts to prohibit the use of cryptocurrencies for payments in late March, citing the need to avert different financial and economic concerns, with the SEC releasing guidelines meant to deter digital asset operators from offering such services.
