The government of Thailand is moving to benefit from the digital asset industry growth by allowing tax-free issuance of digital tokens for investment.
Thailand’s cabinet has agreed to waive corporate income tax and value-added tax (VAT) for companies that issue investment tokens, Reuters reported.
Announcing the news on March 7, deputy government spokesman Rachada Dhnadirek said that companies will be able to access alternative ways of raising capital through investment tokens in addition to conventional methods like debentures.
Rachada added that the government expects investment token offerings to generate 128 billion Thai baht ($3.7 billion) over the next two years. The state estimated potential losses of tax revenues at 35 billion baht ($1 million).
Thailand has taken a lot of steps to clarify local crypto-related taxation rules, with authorities suggesting the adoption of a 15% capital gains tax for investors in early 2022. The government subsequently scrapped the plans, exempting crypto traders from the 7% VAT on authorized exchanges a few months later.
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Local regulators were also working to implement wider crypto regulations last year, with Thailand’s Securities and Exchange Commission banning the use of cryptocurrencies for payments in March 2022.
The news comes amid the Thai SEC continuing to work on stricter crypto regulations to protect investors. In January 2023, the financial regulator introduced new rules for crypto custody services, requiring all crypto custodians to have a contingency plan in case of unforeseen events.