Thailand’s finance ministry has abandoned its plans of taxing income generated from cryptocurrency transactions as the opposition for the proposed legislation was mounting.
Quoted by The Financial Times, anonymous source within the Finance Ministry said they are backing down on plans introduce a 15% withholding tax on taxpayers who make profit from cryptocurrencies. The taxation was also intended to apply to mining operations and income from various investment products.
As per a report by Financial Times, Thailand’s military-backed government will instead allow traders to offset their annual losses against gains made in the same year. In the meantime, crypto exchanges and other digital asset platforms that facilitate crypto transactions have been exempted from the capital gains tax.
“The revenue department did a lot of homework and reached out to crypto operators as well to get feedback. It is much more friendly to both investors and the industry,” Pete Peeradej Tanruangporn, CEO of crypto exchange Upbit, tod the publication.
Although no specific taxation standards for crypto assets have been put in place, but the finance ministry was reportedly considering re-classifying returns made on cryptocurrencies as a type of “taxable income.”
Thailand takes steps toward crypto adoption
The Southeast Asian nation has already taken steps toward the adoption of cryptocurrencies, rolling out regulations and guidelines to welcome the business and opportunities that blockchain brings. It has also issued improvement orders for Bitkub and other Thai cryptocurrency exchanges after users were blocked from trading during significant price spikes in 2021.
Last year, Thailand’s securities and exchange commission has published a series of new regulations for crypto businesses, some of which were restrictions that have sparked public outrage. Most recently, it has proposed new guidelines that would govern custody of digital assets held by cryptocurrency operators.
The current rules already require crypto exchanges to share the information of users with regulators, whenever funds are transferred between firms, to curtain a growing number of illicit activities stemming under the guise of the global cryptocurrency industry.
Earlier in 2021, crypto fund managers and investment advisers were also required to apply for a licence to continue their businesses. As things stood before, money managers trading assets that fell outside the legal definition of securities, futures contracts or equivalent financial instruments were not subject to the SEC supervision. Investors in crypto funds managed by unregulated portfolio managers also did not enjoy the protection of investor compensation funds.