Thailand government, which had come under fire for imposing heavy tax rates on cryptocurrency trading last month, has decided to give some relief to its local crypto community by waiving the 7% Value Added Tax (VAT) on crypto trading transactions. This now leaves only Capital Gains Tax of 15% to be levied on all cryptocurrency trades, which can make life much easier for the trading community of this Asian country.
First drafted in March of this year, the legislation that imposed these two taxes on cryptocurrency trading in Thailand came into effect this week. However, when country’s Revenue Department addressed a press conference on Tuesday its legal affairs director Saroch Thongpracum told the press that authorities would issue a new regulation to waive off the 7% VAT on individual crypto traders to ease their burden, according to a report of local news outlet The Nation.
However, Revenue Department officials were quick to remind that 15% Capital Gains Tax will still apply to income earned from all crypto transactions. Plus, the tax relief will be provided only when people trade on exchanges approved by the authorities of country. An excerpt from The Nation’s report says:
“The Revenue Department will waive value-added tax for people trading in cryptocurrencies on exchange markets approved by the Securities and Exchange Commission (SEC).”
In the end Revenue Department officials added that current regulations will also be revised for private firms trading in cryptocurrencies. As of now firms and individuals both are subject to same 15% Capital Gains Tax on income arising from crypto trading activities, but this will be changed soon.
Thailand’s proposed cryptocurrency legislation has been criticized for being too harsh on entire crypto community. Individuals and firms both have been hit hard. While individuals were hit with a 7% VAT in addition to 15% Capital Gains Tax, firms were hit with Corporate Tax on funds raised from ICOs. In comparison, funds raised from IPOs are not subject to Corporate Tax in Thailand. It remains to be seen what changes are done for private firms now, as promised by Revenue Department officials.