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In times of economic uncertainty and growing loss of confidence in fiat currencies, cryptocurrencies like Bitcoin or Ethereum are among the most discussed alternatives to established currencies. This article intends to provide a brief overview of legal regulations and tax implications of cryptocurrencies in Thailand.
General Situation with regards to cryptocurrencies in Thailand:
According to a ruling issued by the Bank of Thailand on 30 July 2013, it was illegal to:
- Buy and sell cryptocurrency;
- Buy or sell goods or services in exchange for cryptocurrency;
- Send any cryptocurrency to anyone outside of Thailand;
- Receive cryptocurrency from anyone outside the country.
This general ban on cryptocurrencies was lifted on 15 February 2014, and on 14 May 2018, the Royal Decree on Digital Asset Business (RD – DAB), dealing with digital assets – which include Cryptocurrency and Digital Tokens – came into effect.
This had the consequence that even if cryptocurrency is not a lawful currency and does not have legal tender status in Thailand, cryptocurrencies are generally permitted in Thailand. Nevertheless, according to Section 7 RD – DAB, any suspicious activity must be reported to the Anti-Money Laundering Office.
Furthermore, trading or exchange of Digital Assets is subject to restrictions to prevent unfair trading practices similar to those imposed on Securities.
Exchange of Digital Assets
According to Section 26 RD – DAB, digital asset businesses are obligated to obtain a license with the Thai Securities and Exchange Commission (SEC). Digital asset business includes: digital asset exchange, digital asset brokerage, digital asset dealership, other businesses relating to digital assets as prescribed by the Minister under the recommendation of the SEC.
At the moment, the following service providers are approved by the SEC:
- Digital asset exchanges: Bitkub, BX, Satang Pro, Huobi Thailand, ERX, Zipmex, Upbit, Z.comEX;
- Digital asset brokers: Coins TH, Bitazza, and Kulap, Upbit, comEX ;
- Digital Asset Dealer: Coins TH and
- Digital token portal service provider (IOC Portals): Longroot, T-BOX, SE Digital, and Bitherb.
Tax Liability
Digital assets are considered intangible assets and thus follow general taxation principles. An individual’s capital gains are taxed at Thailand’s progressive Personal Income Tax, at a tax rate of up to 35%. Furthermore, gains from digital assets are subject to 15 % Withholding Tax. All Withholding Tax paid can be used as a tax credit for Personal Income Tax.
Taxable events that result in a due and payable tax burden do occur when digital assets are:
- Sold for fiat money (THB, EUR, US$, etc.);
- Used to buy goods and services;
- Exchanged against others.
If you have any questions regarding the above, feel free to contact us at info@franklegaltax.com or call us at +66 (0)2 117 9131-2.