legal – Crypto tax in Thailand
What are the taxes on Cryptocurrency in Thailand and do I need to pay tax?
Exchanges such as those mentioned above have made buying and selling Cryptocurrencies easier than ever in Thailand. As with all investments, Crypto transactions are subject to Tax in Thailand.
How are Cryptocurrency transactions taxed in Thailand?
The Emergency Decree on the Amendment of the Revenue Code (No. 19) B.E. 2561 introduced 2 subcategories of assessable income under Section 40(4):
- The share of profits or any benefits of a similar nature derived from holding or possessing digital tokens (section 40 (4) (h)), and
- The benefit derived from the transfer of cryptocurrency or digital tokens which exceeds the cost of the investment (section 40 (4)(i)).
The amendment to the Revenue Code considers Cryptocurrencies as intangible assets and therefore subject to the following taxes.
Personal Income Tax on Cryptocurrency gains (PIT):
An individual’s capital gains earned through the sale of Cryptocurrencies are subject to PIT.
Currently, there is no option to exclude assessable income from annual PIT returns as stated under Section 40 (4) (h) and (i) of the Revenue Code. Therefore, individual taxpayers are required to include any income made from the sale of Cryptocurrencies when filing their annual personal income tax returns.
Thailand’s PIT is calculated on a progressive scale of up to 35%. More details on Personal Income Tax can be found here.
Please see the following example of a PIT calculation:
In this example, David, a Thai resident purchases some Cryptocurrency from a Thai exchange platform and transfer his profit to his Thai bank account.
David purchases some Bitcoin valued at 1,600,000 THB and by the end of the year the value of the Bitcoin has increased to 4,000,000 THB.
David is working in Thailand and has an annual salary of 600,000 THB per year, his company had deducted 19,000 THB for the Withholding Tax. David is single, has an insurance policy allowing him to deduct 25,000 THB from his return. When David includes the revenue earned from his Crypto transactions, he will reach the 30% PIT threshold.
- Total income : Salary 600,000 + Gain from selling BTC 2,400,000 = 3,000,000
- Applicable deductions: Expenses 100,000 + Allowance 60,000 + Insurance 25,000 = 185,000
- Taxable income: 3,000,000 – 185,000 = 2,815,000
- Total income tax: 609,000
- Additional tax to pay: 609,000 – WHT 19,000 = 590,000
*All figures above are in THB
Withholding Tax on Cryptocurrency transactions (WHT):
Additionally, any gains made from Cryptocurrency transactions are subject to a 15% Withholding Tax as stated by Section 50 (2) (f) for Thai residents and Section 50 (2) (a) for nonresidents. The 15% WHT paid can be claimed as a tax credit against any PIT payments.
However, it is important to note that this is not applied in everyday practice. Crypto exchanges in Thailand will not deduct the WHT tax from transactions made on their platforms.
What type of Cryptocurrency transactions are considered assessable income and subject to tax?
The following transaction types are considered taxable events and are subject to taxes mentioned above:
- Cryptocurrencies converted into FIAT (a Government backed legal tender such as USD, THB, EUR etc.);
- Cryptocurrencies used in exchange for goods and services;
- Cryptocurrencies exchanged against others e.g. Ethereum being used to purchase Bitcoin.
The 2018 Amendment to the Revenue Code introduced the mandatory payment of Withholding Tax on all Cryptocurrency transactions. It also clearly states that any capital gains made from such transactions must be included in the yearly PIT returns. Our tax experts can assist you with the filing of your yearly PIT return, please click here for more info.
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