The Thailand government’s cabinet finally approved a draft of a royal decree for the regulation of the cryptocurrencies and initial coin offerings. Finance Minister Mr. Apisak Tantivorawong notified that although there are no changes in the tax structures the definition of the digital assets has been modified. Under this, all crypto businesses need to obtain a license to trade and as well as report information from now on to the anti-money laundering office of Thailand.
Speaking about it, the Bangkok Post said that,
“Cryptocurrencies and digital tokens, removing other assets such as electronic data, as specified in the previous draft,”
And further added that the only major change is in the definition of the digital assets. However, it is still not a law, the decree needs to be published in the Royal Gazette.
Furthermore, the new law will be required and is a necessity for the prevention of money laundering, tax crimes, etc. the main aim behind the decree is to protect the investors and not to prohibit digital asset-related translations.
Mr. Apisak asserted that the ministry along with the Thai Securities and Exchange Commission (SEC) is working on the laws that require all digital asset transactions to be registered with relevant authorities.
Thai Rath also added, “Those involved in all digital currency businesses, such as dealers or digital currency exchanges must obtain a license from the [Thai] SEC or a foreign currency dealer. They must report the source of the assets and the amounts of transactions to the Anti-Money Laundering (AML) Office,” and also said that “the government wants to protect retail investors.”
Deputy Finance Minister Mr. Wisut Srisuphan on this explained that when the new law will be enforced, the investors involved in trading of digital assets would have to pay a 7% value-added tax (VAT), on top of the 15% withholding tax on capital gains. He also added that retail investors will be exempt from paying VAT if they trade digital assets through exchanges and the traders who are unable to generate any capital gains on their business will only need to pay VAT.
Korn Chatikavanij, chairman of the Thai Fintech Association said on the new tax law that it, “would hinder the growth of domestic startups as they will register their businesses overseas to avoid the levy.” He further said since Singapore waives the capital gains tax and thus it will work as a good location to raise funds from ICOs, providing support for the registration of ICOs.
In the decree, it is stated that the ICO issuers will be given 90 days by the Thai SEC, to inform them of their plans before the law is issued. Earlier the timeline was limited to 60 days but after a lot of complaints from the business-men, the timeline was extended.
As lots of clarification are still required, Jay Mart Plc, a Thai Stock Exchange-listed firm postponed the sale of Jfin coin on a local crypto exchange TDAX from April 2 to May 2.
What do you think about this regulation on cryptocurrencies and ICO’s?