Thailand has introduced a significant tax incentive to further develop its digital asset market. Following the March 2022 removal of income tax on cryptocurrency trading profits, the government has now exempted a 7% Value-Added Tax (VAT) on crypto and digital token transactions until December 31, 2023.
Key Regulatory Updates
Two Royal Decrees enacted these changes, effective May 25, 2022:
- Royal Decree No. 744 (2022)
Exempts VAT for cryptocurrency/digital token trades on licensed digital asset exchanges under the Digital Asset Act. - Royal Decree No. 745 (2022)
Waives VAT for retail Central Bank Digital Currency (CBDC) transactions issued by the Bank of Thailand for public use within its sandbox project.
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Implementation Timeline
The VAT exemption applies retroactively to eligible transactions occurring between:
- April 1, 2022 → December 31, 2023
Supporting Documentation Requirements
The Revenue Department’s Announcement No. 424 specifies:
- Criteria for income tax exemptions
- Methods for calculating taxable amounts
- Record-keeping rules for transaction verification
Market Impact and Strategic Goals
This policy aims to:
✔ Enhance Thailand’s global competitiveness in digital assets
âś” Develop critical payment infrastructure for the digital economy
âś” Attract international investors to the local crypto market
The tax relaxation aligns with the Ministerial Regulation No. 380 under the Revenue Code, creating favorable conditions for traders to offset capital gains against losses.
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FAQs
Q1: Does the VAT exemption apply to foreign investors?
A: Yes, provided transactions occur on Thai-licensed exchanges during the exemption period.
Q2: How does this affect existing crypto holdings?
A: Only new trades executed between April 2022–December 2023 qualify; earlier holdings remain subject to previous tax rules.
Q3: Are NFTs covered under this policy?
A: No, the decree specifically mentions cryptocurrencies and digital tokens—NFTs require separate evaluation.
Q4: What documentation should traders maintain?
A: Keep detailed records of transaction dates, values, and counterparties for potential audits.
Conclusion
Thailand’s progressive tax policies solidify its position as a leading digital asset hub in Southeast Asia. Market participants should consult legal experts to fully leverage these incentives while ensuring compliance.
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