Thailand’s Revenue Department plans to apply taxes on overseas revenues from cryptocurrency dealers, eliminating a prior tax loophole, in an effort to support its efforts to stimulate the economy. This new rule will give Thai authorities the ability to tax foreign income beginning on January 1, 2024, and it will change the way that foreign earnings are taxed significantly by 2025.
The principle of tax is that you must pay tax on income you earn from abroad no matter how you earn it and regardless of the tax year in which the money is earned
An anonymous source from the Thai Finance Ministry.
These tax rules will affect several groups, including Thai residents trading in foreign stock markets through overseas brokerages, cryptocurrency traders, and individuals residing in Thailand for over 180 days per year. Additionally, the policy aims to target those who have exploited a loophole, allowing them to bring foreign earnings into the country tax-free after keeping them offshore for more than a year.
However, this move could have unintended consequences. Reports suggest that it might discourage foreign investors, particularly private bankers, who could perceive Thailand’s regulatory environment as uncertain. Furthermore, concerns have been raised about the potential impact on income inequality in the country, as Thailand already has one of the highest income inequality rates in the East Asia and Pacific region.
In related news, Thailand’s political landscape has also seen shifts. Srettha Thavisin, formerly the CEO of real estate giant Sansiri, has become Thailand’s Prime Minister. Sansiri, known for its digital asset involvement, acquired a 15% stake in XSpring, a Thai digital asset service provider in collaboration with Krungthai Bank, focusing on cryptocurrency services and licensed ICO facilitation.
Moreover, Thailand is cracking down on fraudulent activities on social media platforms, particularly Facebook. The Ministry of Digital Economy and Society (MDES) has warned of the possibility of a court-ordered shutdown of Facebook if it does not take robust action against investment and crypto scam ads. These deceptive ads have already ensnared over 200,000 individuals, promising fictitious high returns and encompassing various scams.
Thailand’s evolving stance on cryptocurrencies and the broader digital landscape suggests a dynamic environment with potential implications for both its economy and political landscape. Investors and industry observers will be closely watching these developments unfold.