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According to a government spokeswoman, Thailand’s cabinet decided to exempt businesses that issue digital tokens for investment from corporate income tax and value-added tax.
In addition to more conventional techniques like debentures, companies would have access to investment tokens as an additional source of money, Rachada Dhnadirek told reporters at a news conference.
$1 billion loss in taxes
The Thai government may lose almost $1 billion in taxes as a result of the new law, which will result in approximately $3.7 billion in initial coin offerings over the next two years.
Whether businesses must make disclosures to the Thai Securities and Exchange Commission before launching ICOs has not been specified.
Broader crypto laws to be enforced
Although Thailand’s Securities and Exchange Commission forbade the use of cryptocurrencies for payments in March 2022, local regulators were also moving to enact broader crypto laws.
While cryptocurrencies have gained significant popularity and attention worldwide, with an increasing number of people investing in digital assets like Bitcoin, Ethereum, and others, Thailand is one of the countries that have been proactive in regulating cryptocurrencies.
In March 2022 the Thai Cabinet also approved relaxed tax rules for cryptocurrency traders, in line with other crypto-related measures previously announced by the government. Investors will be exempt from a value-added tax (VAT) of 7% for crypto trading on authorized exchanges.
But in September 2022, the Securities and Exchange Commission (SEC) has rolled out new rules on advertising for cryptocurrency companies as the industry comes under greater scrutiny from authorities.
The Digital Asset Business Emergency Decree
In 2018, the Thai government enacted the Digital Asset Business Emergency Decree, which regulates digital asset transactions and related activities in the country.
The decree covers cryptocurrencies, digital tokens, and other digital assets, and it applies to individuals, businesses, and exchanges operating within Thailand. The decree classifies digital assets into three categories: cryptocurrencies, digital tokens, and other digital assets.
Cryptocurrencies are defined as digital assets used as a medium of exchange, while digital tokens are digital assets used for investments, voting rights, or other purposes. Other digital assets are digital assets that do not fall into the categories of cryptocurrencies or digital tokens.
Under the Digital Asset Business Emergency Decree, all entities engaging in digital asset activities must obtain a license from the Thai Securities and Exchange Commission (SEC) before conducting any business.