While most governments struggle with digital asset taxation, Thailand has approved a five-year tax exemption plan that the government will boost innovation. In nearby Malaysia, the government has launched a new regulatory sandbox for digital asset businesses as competition to control the Southeast Asian sector is heated.
Tax-free in Thailand
Julapun Amornvivat’s Deputy Finance Minister announced his tax-free plan at X, so it’s “full speed.” He revealed that the Cabinet has approved new tax measures to support Thailand’s ambitions to become a “hub of digital assets.”
“The key point is the personal income tax exemption from capital gains from selling digital assets, provided the transaction is carried out through an operator regulated by the SEC, covering the period from January 1, 2025 to December 31, 2029,” he said.
With the new exemption, the Thai government intends to promote transparent digital asset trading on regulated exchanges and support innovation, the Deputy Minister said. Also, capital gains will be eliminated, but the government expects an increase in transactions to increase medium-term tax revenues at least 1.5 billion ($30.6 million).
“The main goal of this legislation is to stimulate Thailand’s crypto market, attract foreign investment, boost domestic spending and pave the way for other forms of taxation, such as value-added tax (VAT) in the future,” Amornvivat added.
Data from digital property tax service provider Blockpit shows that $30 million in “crypto” tax revenue is comparable to countries such as Switzerland, Belgium, Norway and Portugal. These countries also have tax policies that are attractive to the sector. For example, Portugal exempts taxation on individuals who have held digital assets for more than a year.
Blockpit estimates that the US raised $1.9 billion in 2023, six times the second place India, earning $303 million. Japan, France and the UK make up the top five.
In addition to the exemption, the Thai Tax Agency has also committed to complying with the Crypto Asset Reporting Framework, designed by the Organization for Economic Co-operation and Development (OECD). The Global Standard will be launched in 2022 and requires exchanges, wallets and brokers to report all transactions to prevent tax evasion. More than 50 countries signed the agreement in March this year.
“I firmly believe this is another important step in enhancing the economic potential of our country and enhancing the opportunities for Thai entrepreneurs to grow at the global stage,” the Deputy Minister concluded.
Meanwhile, the Securities and Exchange Commission of Thailand (SEC) recently launched public consultations on the listing standards for digital assets on local exchanges. The proposed criteria will expand the list of issuers, promote innovation, and all increase investor protection measures.
Malaysia launches digital asset innovation hub
In neighbouring Malaysia, the government has launched a digital asset innovation hub to promote innovation in the blockchain sector.
The hub was launched by Prime Minister Anwar Ibrahim. Anwar Ibrahim described it as an initiative that sparked “deeper cooperation between regulators and industry players.”
The new hub will provide both local and international virtual asset service providers (VASPs) with regulatory sandboxes to test their products and services before they are deployed to consumers. Top financial regulators, including Bank Negara Malaysia and the Securities Commission, will become part of projects that ensure that products comply with regulations.
“Our ambition is to coordinate infrastructure, policy and talent in both the public and private sectors, pursuing a digitally competent and future-ready Malaysia,” Ibrahim added.
Premier has identified stubcoins backed by local ringgits, programmable payments and supply chain funding as priority areas for the hub’s VASP. In particular, programmable payments have been of interest to Malaysia for some time. Central Bank Digital Currency (CBDC) of the country that central banks have been exploring for many years will support these payments. With the Ringgit-backed stubcoins, Malaysia joins dozens of countries promoting stubcoins supported by local currencies, as US support options dominate the market with a 98% market share.
The central bank has expressed support for the hub, which Governor Abdul Rashid Gafor said will allow Malaysia to “build a strong foundation for an adaptive and resilient economy.”
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