Thailand’s cabinet is set to vote on implementation of a new 10% capital gains tax on profits from cryptocurrency investment. Royal Decree will empower the SEC to regulate digital currencies.
New Tax Part of Royal Decree
The Thai Revenue Department has asked the cabinet to vote on an amendment to the new revenue code which would include a proposed 10% capital gains tax on profits from trading in cryptocurrency according to a source inside the ministry of finance.
The Bangkok Post reported this morning that the tax will be part of a Royal Decree proposed to allow the SEC to comprehensively regulate all aspects of the crypto market including ICO’s.
The new decree will classify cryptocurrency as digital assets, not currency, meaning that the SEC will be charged with regulating all aspects of virtual coins. Rapee Sucharitakul the secretary -general of the SEC said the regulations should set standards for information disclosure of cryptocurrency trading while also overseeing the launching and proceeds generated by ICO’s.
He was further quoted by the Post speaking about investor protection included in the new regulations as saying;
“The regulatory framework will cover cryptocurrencies in several areas, including investor protections and how cryptocurrencies have sometimes been used as a medium for money-laundering, tax avoidance and Ponzi schemes”
This ruling will come after what has been a twice extended period of consultation to review the regulatory framework of cryptocurrency in the Kingdom.
Regulations a Long Time Coming
Chairman of The Thai Fintech Association, a startup accelerator Korn Chatikavanij, who previously served as the country’s finance minister between the end of 2008 and mid-2011 said in an interview last week that his organization supports the new plan.
“I agree with the Finance Ministry’s [view] of letting the SEC be the only organization governing digital assets, because it already oversees securities and has a profound understanding of digital assets,”
Said Korn, according to a Friday report by the Bangkok Post.
Others in the government have cited similar laws that have now passed in the U.S. as a positive step since they help to regulate trade in cryptocurrency while tapping into a previously untaxed source to generate income for the nation.
Traders may seek to invest outside of Thailand in order to avoid paying the tax but could face punishment once they bring the funds back in, including possible liability under Thailand’s very strict money laundering act. Either way there is likely to be an exodus from exchanges in the once crypto-friendly nation.
The Royal Decree will be forwarded to the cabinet for consideration today and is expected to be accepted and put into enforcement by the end of the month.