UPDATED | May 16, 2018:
A 7 percent value-add tax (VAT) was recently placed on individual cryptocurrency investments, drawing ire from many who called the new policy biased. Yesterday, Saroch Thongpracum, the director of legal affairs for Thailand's Revenue Department, said that the agency would waive the VAT, but investors will still be required to pay a 15 percent withholding tax on income earned from transactions.
Local news outlet The Nation reported that under the new law, private companies launching initial coin offerings (ICOs) will be subject to corporate income tax on raised capital. However, private companies issuing initial public offerings of their shares will not be required to pay income tax. The director clarified that digital tokens are considered "intangible assets" to the Revenue Department and, therefore, earnings from them are taxable.
New regulations from the Thai Securities and Exchange Commission that focus on income earned from ICOs are expected next month.
ORIGINAL | May 14, 2018:
On May 13, Thai King Rama X issued a royal decree to implement a law that will regulate cryptocurrency transactions in Thailand. The 100-section law was published in The Royal Gazette and defines cryptocurrencies as "digital assets and digital tokens."
According to the Bangkok Post, Thailand's Finance Minister, Apisak Tantivorawong, said in March that the law is not to ban cryptocurrency, but to protect investors and keep it from being used in elicit crimes such as money laundering and tax evasion.
The law not only obligates members of Thailand's Security Exchange Commission (SEC) to oversee and regulate digital assets, but also stipulates that sellers of cryptocurrency must register with the SEC within 90 days or face a penalty of twice the value of the digital transaction, or at least 500,000 baht (about $15,700 at time of press). Defiant sellers may also face up to two years in jail.
The decree will reportedly be expanded to require that all private cryptocurrency exchanges, dealers, and brokers register with the appropriate authorities.
In February of this year, The Bank of Thailand issued a statement banning financial institutions from investing in or trading cryptocurrency. But this new law, which was drafted in March, reflects a more permissive sentiment and has given the government a way to track and regulate the news asset class.
Correction: A previous version of this article incorrectly identified the king of Thailand as Bhumibol Adulyadej.