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SEC Thailand new regulation for digital platforms approved by the cabinet
On 24 May 2022, the Cabinet approved a new regulation which aims to strengthen the existing regulations relating to digital platforms.
Previously, the Electronic Transaction Development Agency (ETDA) proposed a draft Royal Decree on regulating Digital Platforms, which has just received cabinet approval and will move onto the next legislative shortly. This new regulation will work in conjunction with this Royal Decree to govern and impose more obligations upon digital platforms. The additional obligations would be beyond the current scope of the Draft Royal Decree.
- The new regulation spits Digital Platforms into 5 categories
- Digital platforms will now be required to conduct transparency reports and implement a complaint handling system.
- The promotion of fair competition is a key component of the regulation. In order to achieve this, the new regulation will prohibit certain actions by digital platform service providers.
- The supervision of contracts or terms between digital platforms and users will now also be monitored in order to ensure compliance with the relevant regulatory bodies.
What does the SEC Thailand new regulation cover?
Under the new regulation, the Electronic Transaction Development Agency (ETDA) will now be responsible for the following:
- The supervision of digital platform service operators,
- The governance of fair competition,
- Ensuring that the user’s or consumer’s rights to use platform services are protected, and
- Cooperation between the relevant regulatory agencies in order to be consistent with other governing authorities.
What are the key principles of the regulation?
The following points will make up the key principles of the new regulation.
Categorization of Digital Platforms
Digital platforms that will be subject to this new regulation will be split into 5 categories:
(i) intermediary services;
(ii) hosting services;
(iii) online platform;
(iv) very large online platform; and
(v) gatekeeping platform.
Each of these categories will be subject to specific obligations and exemptions. However, certain types of digital platforms are exempted from the new regulation. Examples include:
- digital platforms that have less than 10,000 transactions per day,
- digital platforms that do not operate for the public, or
- digital platforms that operate only for the distribution of its own products.
Specific obligations and exemptions for certain categories of digital platforms
Under the new regulation, digital platforms are subject to new requirements such as:
- conducting a transparency report and
- implementing a complaint handling system.
Supervision of contracts or terms between digital platforms and users
Terms of contracts or any agreement between digital platforms and users will be supervised to ensure that they are in line with the requirements of the competent authority. Failure to satisfy these requirements will result in the terms or provisions of that agreement being deemed to be void.
Furthermore, any digital platform that offers transportation services and has a large number of users operating as transporters (riders) would be required by the new regulation to clearly describe its duties and obligations in the governing terms or agreement of the service.
Governance of fair competition among digital platforms
To ensure fair competition in digital platform business, the new regulation will also prohibit certain actions of digital platform service providers to prevent unfair competition arising. To achieve this, the Trade Competition Commission of Thailand will also be authorised to enforce a list and criteria of online platforms to be considered as “Gatekeeping Platforms”. These Gatekeeping Platforms will have the power to control the user’s access to the digital service, and would likely be subject to specific competition related prohibitions.
The criteria for what will be considered a Gatekeeping Platform will be further prescribed by the competent authorities at a later date. Such considerations could be based on this such as the number of users, market share or annual revenue of the digital platform.
What else do I need to know?
The regulation will be issued as an Act, which will outrank the Royal Decree. This suggests that once the new regulation has been enacted, it could eventually replace the Draft Royal Decree as the main regulation of digital platforms.
As the new regulation has currently only been approved in principle and would require further legislative processes to be complete before it can be enforced as an Ac. There is no timeline in place to say when the new regulation will be formally issued and whether any amendmendments will be made to the approved principles mentioned above.
How can our experts help?
If you are interested in learning more about how your business could be affected by this new regulation, please feel free to book a consultation with our experts.
Please note that this article is for information purposes only and does not constitute legal advice.
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Frequently asked questions
Do you pay tax on crypto in Thailand?
The transfer of cryptocurrencies or digital tokens via a registered exchange in Thailand are now exempt from VAT (7%). This new legislation has been retroactively enforced from April 1st 2022, and will last until December 31st 2023.
Which country is tax free for cryptocurrency?
Examples include, Germany, Belarus, El Salvador, Portugal, Singapore, Malaysia. and Malta.
Is cryptocurrency legal in Thailand?
Yes Cryptocurrency is legal in Thailand. The Thai Government has been enacting and releasing legislation which is designed to create a legal framework for Cryptocurrencies in Thailand.
Is Binance legal in Thailand?
Binance has not been issued with the required licence from Thailands Security and Exchange Commission.
Does Thailand have capital gains tax?
Yes, Thailand has Capital Gains Tax and is set at a rate of 15%.
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