Various digital asset operators in Thailand have submitted a request to remove capital gains taxes on cryptocurrencies. Unfortunately, that request has been denied by the country’s Revenue Department. The 15% withholding tax on digital asset trades will remain in place for the foreseeable future, which may hinder the country’s chances of making a positive impact in the cryptocurrency industry.
Thailand Maintains Cryptocurrency Withholding Tax
Every time a country’s government or financial agency decides to issue cryptocurrency taxation guidelines, there is a lot of feedback to contend with. Although one might argue taxing Bitcoin and other currencies brings more legitimacy to this new form of money, it also poses a fair few issues for traders. Especially when it comes to filing and reporting taxes, things are never as easy as they appear at first.
In Thailand, the situation has taken an interesting turn. With various digital asset operators requesting that the Revenue Department remove the 15% withholding tax, a clear message has been sent. Sadly, this request has been denied by the agency because they are convinced that retail investors should not be encouraged to trade such assets now or in the future.
A royal decree to regulate cryptocurrency and digital asset transactions in Thailand is a positive development, as it shows the nation has no interest in banning cryptocurrency or related activities, unlike some other countries in Asia. However, the 15% withholding tax will make it less appealing to dabble in cryptocurrencies and digital assets, which is not the optimal outcome by any means.
With the government mainly intent on protecting retail investors from losses from trading digital assets, the withholding tax makes a lot of sense. Additionally, Thai officials want to ensure that digital assets and cryptocurrencies cannot be used for money laundering purposes. Anyone who makes a digital asset trade in the country will pay a 7% value-added tax and the 15% withholding tax on capital gains and returns. That is, assuming this royal decree is approved and enforced by the Council of State.
Thailand has not exactly been a frontrunner when it comes to cryptocurrency. Even so, there is a booming ecosystem in this part of the world. Whether or not these new regulations will have a big impact on local interest in digital assets is a different matter altogether. It is possible that users will simply buy their currencies and hold onto them longer due to these additional taxes. That would not necessarily be a bad outcome.
All of this further confirms that various countries around the world will let cryptocurrencies thrive, despite issuing taxation guidelines. It is still a preferable alternative to having cryptocurrency activity banned altogether. With more Asian countries taking a semi-positive approach in this regard, it will be interesting to see whether or not China will change its stance on cryptocurrencies in the future.