Thailand: 10% crypto levy mulled

A possible 10% capital gains tax on investment gains in cryptocurrencies will seek cabinet approval today, says a source at the Finance Ministry.¬
The Revenue Department will propose the cabinet amend the Revenue Code to pave the way for the tax-collecting agency to impose the 10% capital gains tax from¬ investment gains in digital currencies, the source said. The tax is part of a royal decree to comprehensively regulate cryptocurrencies and initial coin offerings (ICOs).¬
The dividend tax on equity investment will be applied to digital tokens, the source said.¬
Deputy Prime Minister Somkid Jatusripitak said last week the government would try its best to issue the new law to regulate ICOs and cryptocurrencies this month.¬
Virtual coins will be classified as digital assets, not currency, so the royal decree will empower the Securities and Exchange Commission (SEC) to regulate all aspects of virtual coins.¬
There are three types of ICOs: asset-backed, securities-backed and utility tokens. Utility tokens let investors purchase a company’s products or services; asset tokens enable¬ investors to acquire rights in assets such as bullion or properties; and securities tokens allow investors to obtain rights in revenue- or profit-sharing without engaging in day-to-day operations.¬
Rapee Sucharitakul, secretary-general of the SEC, said recently the regulations must set standards for information disclosure and transaction reporting, while system security,¬ transaction objectives and utilisation of proceeds arising from ICOs would also come under the regulatory framework.¬
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, he said. Adisak Sukumvitaya, chief executive at Jay Mart Plc, said he has not been informed about this¬ withholding tax on cryptocurrency investment. It is up to the government to define what cryptocurrencies are and whether they are classified as securities or utilities, said Mr Adisak.¬
“Personally, I think the regulator should announce a clear picture for the cryptocurrency regulatory [framework] at one time rather than gradually [unveil] the¬ framework in bits and pieces,” he said. Arnat Leemakdej, professor at Thammasat Business School, said this tax could be¬ deemed as a capital gains tax because ICOs have no dividend as profit made from cryptocurrency trading is not dividend profit.¬
“Those who trade cryptocurrencies could be taxed and such taxation has already started in the US,” said Prof Arnat.¬
Traders could seek to engage in cryptocurrency trading overseas, but they could be subject to money laundering liability once they repatriate such gains into Thailand, he¬ said. Profits earned from cryptocurrency trading is likely to be parked abroad by wealthy investors, said Prof Arnat.¬
This tax could be considered “shooting two birds with one stone” by seeking a way to generate revenue for the state and obstruct the trend of cryptocurrency speculation, he said.¬
In related news, a royal decree on cryptocurrency supervision will be forwarded for cabinet consideration today, with three main asset categories in the regulatory¬ framework, namely cryptocurrencies, digital tokens, and assets in the electronic format, said the source.¬
The SEC and Bank of Thailand will supervise these digital assets, said the source, without providing further details.¬
A definition of traders will also be designated for classification, said the source.¬

Source:¬ https://www.bangkokpost.com/business/news/1427030/10-crypto-levy-mulled