Thailand Introduced 15% Capital Gain Tax On Crypto For Investors And Miners
Profits from cryptocurrency trading in Thailand are now subject to a 15% capital gains tax, according to a source from the Finance Ministry. The tax will be applicable to digital asset investors and miners but will exclude exchanges.
The country’s Finance Ministry recommends investors to identify their income from crypto when filing tax this year to avoid legal penalties.
In 2022, all taxpayers who gained from cryptocurrencies, including investors and mining operators, are subject to a 15% withholding tax. However, digital asset exchanges are not subject to the new tax.
According to the sources familiar with the matter, the Thai Revenue Department plans to tighten its surveillance on crypto trading this year after it saw significant growth in market size and the value of the digital asset market in the previous year.
The Revenue Department has the authority to collect taxes from cryptocurrency trading as profits from such activity can be considered assessable income under Section 40 of the Royal Decree amending Revenue Code No.19.
Not much clarity yet how it will work
According to Akalarp Yimwilai, co-founder and chief executive of Zipmex Thailand, there are still many questions unanswered on how to calculate profits, including whether a gain from a price increase as the US dollar strengthens is considered a profit. He elaborated:
“Tax methods and calculations should be more concise, clear and easy to understand. Many people I know want to pay taxes, but don’t know how to calculate them.
As an exchange provider, Zipmex has been working to develop a system to help our customers calculate profits and losses, but it’s very difficult. If the Revenue Department really has such an advanced data analytics system that it can precisely calculate gains from cryptocurrencies, it would be a great benefit to share it with the industry.”
According to Anon Thadium, a judge on the Central Tax Court, any trader with gains from the sales of cryptocurrencies are considered beneficiaries of crypto transactions. This gain is assessable income under Section 40 and must be calculated for personal income tax, he said.
It is important that once the seller is subject to withholding tax, the profits from crypto transfers must also be filed for annual income tax returns, as such withholding is not considered a final withholding tax, Thadium said.
Sellers can use the deducted tax as a tax credit for a deduction next year under Section 60 of the Revenue Code, he continued.
Thai banks gaining foothold on crypto exchanges
Most of the crypto exchanges in Thailand are either operated by leading banks or wealthy business people. For example, Thailand’s oldest bank Siam Commercial Bank bought out a 51% stake in the country’s largest digital assets exchange, Bitkub, in November last year.
Another important crypto exchange ZipMex Thailand secured $40 million in funding from the nation’s fifth-largest lender Bank of Ayudhya.
