Thailand exempts cryptocurrency transfers from VAT

Thailand is exempting transfers of cryptocurrencies or digital tokens from Value Added Tax (VAT) until the end of 2023.

Good news for cryptocurrency enthusiasts after the terrible fall of recent weeks.

The exemption was announced as a new royal decree issued under the Revenue Code for VAT exemption and comes into force this Thursday, May 26.

Under the new royal decree, all transfers of cryptocurrencies and digital assets on authorized digital asset exchanges will be excluded from paying the tax until December 31, 2023.

The process and execution of the order is the responsibility of the Minister of Finance.

In March, the Thai government agreed to exempt digital asset transactions from taxes.

The recent executive order extends this privilege to transfers of digital assets.

Both exemptions last until the end of 2023.

Akaradet Diawpanich, chief executive of Cryptomind Group Holdings, said the waiver may be aimed at supporting the use of central bank digital currency in the future, but would have little or no effect on investments. into digital assets.

According to him, investors would prefer a tax exemption on capital gains realized on cryptocurrency transactions, as this levy is the main factor that increases the cost of investing in digital assets.

Mr Akaradet said investments in all sorts of risky assets, such as stocks, bonds and cryptocurrencies, have stalled as investors fear inflationary pressures and the Federal Reserve’s tightening monetary policy will slow down global economic growth.

Interest rate hikes and quantitative tightening, or shrinking balance sheets, quickly drain liquidity from the global investment market, he said.

Investments in the digital asset, stock and bond market have all declined significantly, making investors cautious about investing in high-risk assets.

Furthermore, the cryptocurrency market is facing a major crisis triggered by the collapse of TerraUSD and Luna, which caused massive losses to investors.

With TerraUSD having one of the largest market caps, its crash has sent waves through the market and it will take some time to regain confidence in the system, Akaradet said.

He believes investment will pick up when the global economy recovers.


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