A new law has been put in place in Thailand aimed at controlling and regulating Initial Coin Offerings and digital currency transactions. Under the new law digital tokens and virtual currencies are now classified as digital assets. The Security Exchange Commission of Thailand will be responsible for regulating and overseeing transactions in digital currencies. The body will also be responsible for verifying client identity.
With regards to taxation the new law has set the withholding tax rate or the capital gains tax rate at 15% on the income earned in cryptocurrency transactions. This is a tax that had faced strong opposition from Thai Blockchain Association over concerns that it would discourage crypto investments. For individual investors of virtual currencies they will get a 7% waiver on the value added tax. Private firms which launch Initial Coin Offerings will be required to remit corporate income tax based on the funds which they raise.
Registration and licenses
The new law will also require three groups of virtual currency operators to be regulated and these include Initial Coin Offering portals, dealers and brokers. They must all get licenses from the minister of finance.
According to the secretary general of the Security Exchange Commission of Thailand, RapeeSucharitakul, regulations regarding Initial Coin Offerings and virtual currencies will be issued before the end of next month once a public hearing has been conducted. It is expected that the between two to three weeks will be required for the public hearings due to the fact that digital token investments are not only complicated but they carry high risks.
Prevention of crime
Earlier in the year the finance minister of Thailand ApisakTantivorawong had argued in favor of the law saying it was necessary in order to prevent crime, tax avoidance and money laundering. In order to prevent unauthorized transactions and fraud the new law introduces hefty fines as well as jail terms. Unregistered token brokers could face a two-year jail sentence and fines of up to $20,000. Individuals or firms who conduct token transactions via the unregistered brokers also face similar consequences. In the case of fraudulent filings individuals face a jail sentence of five years.
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