Thailand to Tax Overseas Income, Including Crypto, from 2024
Thailand, known for its picturesque beaches, vibrant culture, and growing interest in cryptocurrencies, is set to change its taxation policy significantly. As of January 1, 2024, the Thai Revenue Department will introduce a new taxation rule that will impact not only the local citizens but also expatriates and cryptocurrency traders residing in the country. This move aims to ensure that anyone living in Thailand for more than 180 days a year pays personal income tax on their foreign assets, including income from crypto trading.
Historically, Thailand’s tax laws only applied to foreign income remitted to the country in the same year it was earned. However, the forthcoming regulation will close this loophole and require individuals to declare all income earned overseas, regardless of whether it will be used within the local economy. This move aligns with the principle of taxation, which states that any income earned abroad, no matter its source or the tax year in which it was obtained, should be subject to taxation.
The scope of this new policy specifically targets several groups, including residents who engage in foreign stock market trading through foreign brokerages, cryptocurrency traders, and Thai nationals holding offshore accounts. These changes come as part of Thailand’s broader efforts to regulate the cryptocurrency industry more rigorously.
Recently, Thailand has shown an increasing interest in establishing strict regulations surrounding cryptocurrencies. This newfound focus on law can be attributed to various factors, including appointing a pro-crypto Prime Minister, Srettha Thavisin, in August. Thavisin, a prominent figure in Thailand’s business landscape, pledged support for the crypto industry during his election campaign. He even participated in a significant fundraising round for a crypto-friendly investment management firm, XSpring Capital.
Moreover, the Thai Securities and Exchange Commission has implemented measures to protect consumers in the crypto space, including requiring digital asset service providers to provide comprehensive warnings about the risks associated with cryptocurrency trading. Additionally, the commission has prohibited crypto lending services to safeguard investors.
Thailand’s heightened scrutiny of the cryptocurrency sector can be traced back to several incidents in the past, such as the ban on using cryptocurrency as a mode of payment in April of the previous year. This regulation restricted customers from using cryptocurrencies for transactions and specified that they could only invest in crypto as an asset.
In January 2023, the Thai regulator issued a new set of regulations for crypto custodians, responding to the collapse of the Bahamas-based crypto exchange FTX in November 2022. One of the key provisions was the requirement for crypto platforms to have contingency plans in place to protect customers’ assets in unforeseen circumstances.
Furthermore, in July, the Thai regulator barred crypto exchanges from offering lending services and mandated clear disclosure of cryptocurrency trading risks, ensuring that customers are well-informed about potential threats.
Thailand’s evolving stance on cryptocurrency is intriguing, given its pro-crypto leadership and notable progress in adopting cryptocurrencies. The appointment of Srettha Thavisin, who formerly led Thailand’s leading real estate firm, Sansiri, and played a role in the issuance of a crypto token, SiriHub Token, in 2021 through XSpring Capital, signals the nation’s willingness to embrace the digital asset revolution.
As of the most recent reports, Thailand ranks tenth in Chainalysis’ 2023 Global Crypto Adoption Index, demonstrating its increasing acceptance and integration of cryptocurrencies into its economy.
In conclusion, Thailand’s decision to tax overseas income, including income generated from crypto trading, is a significant step towards fiscal responsibility and regulation. The move reflects the changing landscape of cryptocurrency regulation in the country and aligns with the global trend of governments seeking to impose taxes on digital assets. As Thailand navigates this evolving terrain, observing how its pro-crypto leadership balances innovation and investor protection in cryptocurrency will be interesting.
