The news was revealed by the country’s Finance Minister, who clarified that the tax waiver will be applicable for both primary and secondary offerings on these investment tokens. However, in order to benefit from the tax waiver, companies will be required to register their token offerings. This new tax policy also benefits investors, as those who will invest in the token sales will be exempt from paying value-added tax.
Even though the government of Thailand decided to ban the use of crypto as a means of payment in 2022, investment tokens are still legal in Thailand. In August 2022, Taiwan’s Financial Supervisory Commission (FSC) asked credit card companies to ban payments for crypto-related purchases due to the risky and speculative nature of these assets. According to the FSC, credit cards should be used only as a payment method for goods and services and not facilitate speculative trading and financial investments, as this could lead to debt and a high fiscal burden.
According to theblock.co citing Thailand’s Finance Minister, the tax waiver could cost the government up to THB 35 billion (USD 1 billion) in the next two years. The calculations are based on an estimated THB 128 billion in revenue (USD 3.7 billion) from investment token offerings during the period.
It’s worth noting that utility tokens are not covered by the new crypto tax exemption policy. The reasoning behind this is that utility token use depends on the promotional activity of their issuers.
In January 2023, The Securities and Exchange Commission (SEC) of Thailand has introduced a new set of rules for crypto custodians or VASPs that provide crypto storage services. The new rules dictate that companies offering crypto custody services are required to implement a digital wallet management system in order to support efficient custody of digital assets and keys while ensuring the safety of clients’ assets.
The entities in question should also implement policies and guidelines for the management of digital wallets and keys, and they should ensure proper communication channels to clarify such policies, action plans and procedures, work supervision, and internal control to ensure compliance with the policies.
The SEC also requires crypto custodians to implement policies and procedures for designing, developing, and managing digital wallets and keys. The authority will require crypto custodians to establish a contingency plan in the case of unforeseen events that could affect the wallet management system.
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