Government to control investment in digital currencies

The cabinet yesterday approved in principle to regulate trades in cryptocurrencies, initial coin offerings (ICOs), and activities related to digital assets which will see profits and earnings taxed.

Under the approval, a 15% withholding tax on profits and dividends generated by transactions involving digital assets may be imposed.

Nattaporn Jatusripitak, an adviser in the Prime Minister’s Office, said that the main impetus prompting the cabinets decision was to prevent fraud and money laundering.

He said all corporate entities involved in digital currencies whether brokers or legal representatives must register their operations with the government.

Furthermore, profits and earnings from digital currency transactions will be taxed by the Revenue Department.

He said the Revenue Department has proposed the legal amendment of the Revenue Code with regard to the direction for tax collection on profit and dividends from digital-currency investments.

The tax collection on digital-currency investments will be considered by the Council of the State. Details of both legal drafts will be clearer next week, Nattaporn said.

Normally income from a digital-currency investment can be collected in the same way as other income, which is taxed with a ceiling rate of a 15% withholding tax rate.

Mrs Kesara Manchusree

Meanwhile Mrs Kesara Manchusree, the managing director of the Stocks Exchange of Thailand (SET), stated that she agreed with the cabinet’s approval to regulate digital currencies.

She reported that at present more and more SET registered companies are investing in digital currencies.

She was confident that by 2019 the market capital value of digital currencies in the SET will rise to 2022 trillion baht which corresponds to 150% of GDP.

At present, this stands at 18 trillion baht. Furthermore, she expects the value of daily trading with digital currencies to increase to 100 billion baht which is currently at 73.61 billion baht.