Thailand officially validates draft decree on crypto assets.
Mar 31, 2018 Posted / 797 Views
A decree is a court judgment, especially in a court of equity, bankruptcy, admiralty, divorce, or probate. Moreover, Royal Decrees are signed by the King and by one or more Ministers or State Secretaries.
Recently, the Thai cabinet has approved a draft of a royal decree to regulate cryptocurrencies and initial coin offerings (ICOs), according to local media.
Finance Minister Mr. Apisak Tantivorawong revealed that no major changes have been made to the draft proposed by his ministry earlier this month. The only significant change is the definition of digital assets, which is now “cryptocurrencies and digital tokens, removing other assets such as electronic data, as specified in the previous draft,” the Bangkok Post reported. The decree will be published in the Royal Gazette, after which it will become law.
The intention of the minister to this draft decree is explained as follows.
Mr. Apisak added that his ministry and the Thai Securities and Exchange Commission (SEC) are working on “laws that require all digital asset transactions, including those of digital asset exchanges, brokers, and dealers, to be registered with relevant authorities,” the news outlet highlighted.
The draft decree will grant ICO issuers 90 days to inform the Thai SEC of their plans before the law takes effect, the news outlet also reported. This period was extended from 60 days after market participants expressed their difficulty that “60 days was not a reasonable amount of time.”
Thai Rath elaborated, “Those involved in all digital currency businesses, such as dealers or digital currency exchanges must obtain a license from the SEC or a foreign currency dealer. They must report the source of the assets and the amounts of transactions to the Anti-Money Laundering (AML) Office,” adding that “the government wants to protect retail investors.” Taxation Finalized.
Deputy Finance Minister Mr. Wisut Srisuphan confirmed that taxation on crypto traders as proposed in the previous draft remains unchanged, the Bangkok Post described, adding: Investors who make digital-asset related trades will be liable for a 7% value-added tax (VAT) payment, on top of the 15% withholding tax on capital gains and returns from such investments, when the new law is enforced…Retail investors will be exempted from paying VAT if they trade digital assets through exchanges.
Those who have no capital gains will only pay VAT, the deputy finance minister clarified. Unfavorable for ICOs, Korn Chatikavanij, chairman of the Thai Fintech Association, commenting on the new tax law that it “would hinder the growth of domestic startups as they will register their businesses overseas to avoid the levy” He believes that “it is not a problem for ICO issuers” to take their offerings to Singapore even though the cost could be higher than in the country. The news outlet quoted him saying
With its decentralized nature, the crypto market was always out of control of the financial watchdogs. Singapore is one of the countries which are enforcing laws in order to regulate cryptocurrencies and protect their citizens interests. Singapore location is most suited to raise funds from ICOs. It waives the capital gains tax, so the market environment supports the registration of ICOs with good prospects there.
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