The government of Thailand is making a significant move towards benefitting from the growth of the digital asset industry. In a recent announcement, the cabinet of Thailand has agreed to waive corporate income tax and value-added tax (VAT) for companies that issue investment tokens.
This move is aimed at enabling companies to raise capital through investment tokens, in addition to conventional methods like debentures. Thailand’s deputy government spokesman, Rachada Dhnadirek, stated that the government expects investment token offerings to generate over $3.7 billion in revenue over the next two years.
The government anticipates that the tax incentives will encourage more firms to adopt the use of investment tokens, leading to increased investment in the digital asset industry.
With the adoption of this approach, Thailand’s government is not only promoting the growth of the digital asset industry but also fostering investor protection. The move follows efforts to clarify local crypto-related taxation rules, with the government initially suggesting the adoption of a 15% capital gains tax for investors in early 2022.
However, the plans were later scrapped, and crypto traders were exempted from the 7% VAT on authorized exchanges a few months later. Thailand’s regulators have also been working to implement broader crypto regulations, with the Securities and Exchange Commission (SEC) of Thailand banning the use of cryptocurrencies for payments in March 2022.
As of January 2023, the financial regulator has introduced new rules for crypto custody services, requiring all crypto custodians to have a contingency plan in case of unforeseen events.
Thailand’s move to offer tax breaks for investment token issuers is expected to have a positive impact on the country’s economy, creating a conducive environment for businesses to raise funds and invest in the digital asset industry.
In conclusion, Thailand’s government is setting the pace for other countries to follow, by creating an enabling environment for businesses to participate in the digital asset industry. The decision to waive corporate income tax and value-added tax for companies issuing investment tokens will enable firms to raise capital through alternative methods, leading to an increase in investment in the digital asset industry.
