VAT and personal income tax exemption for trading cryptocurrencies or digital tokens

Keywords: Mazars, Thailand, Tax, VAT, Personal income tax, Cryptocurrencies, Royal Decrees, Government Gazette, Revenue Department

7 April 2022

1. Draft Royal Decrees on VAT exemption

On 8 March 2022, the Cabinet approved the principles of two draft Royal Decrees proposed by the Ministry of Finance to exempt the following from VAT:

• the transfer of cryptocurrencies or digital tokens in the digital asset exchange authorized by the Minister of Finance; and
• the transfer of digital currencies issued by the Bank of Thailand under the project for developing and testing the use of digital currencies issued by the Bank of Thailand.

The VAT exemption would be from 1 April 2022 to 31 December 2023.

2. Ministerial Regulation on personal income tax exemption

Ministerial Regulation Number 380 was published in the Government Gazette on 18 March 2022. It exempts profits from the transfer of cryptocurrencies or digital tokens from personal income tax by an amount equal to any loss from the transfer of cryptocurrencies or digital tokens incurred in the same tax year. However, this applies only to profits and losses from the transfer of cryptocurrencies or digital tokens made in an authorized digital asset exchange under the law on a digital asset business. 

In addition, on 24 March 2022, Notification of the Director-General of the Revenue Department on Income Tax No. 424 (“the Notification”) was issued to specify the rules, procedures, and conditions for the personal income tax exemption under Ministerial Regulation Number 380. Under the Notification, the calculation of profits and losses from the transfer of cryptocurrencies or digital tokens made in a digital asset exchange authorized under the law on a digital asset business must be in accordance with generally accepted accounting methods. When any generally accepted accounting method is chosen, that method must be used throughout the tax year.  The value of cryptocurrencies or digital tokens remaining on the last day of the tax year which is calculated using the generally accepted accounting methods mentioned above shall be treated as the value of cryptocurrencies or digital tokens carried forward to the next tax year.

Taxpayers earning profits from the transfer of cryptocurrencies or digital tokens in a digital asset exchange authorized under the law on a digital asset business must prepare an account showing profits and losses from the transfer of cryptocurrencies or digital tokens containing at least the following items:

1. an abbreviation of the cryptocurrency or digital token;
2. the date and time of the transfer of cryptocurrencies or digital tokens;
3. the type of transaction;
4. the amount of cryptocurrencies or digital tokens transferred;
5. the price of the transferred cryptocurrency or digital token;
6. the value of cryptocurrencies or digital tokens in Thai baht calculated using the figures in points d and e above;
7. The value of the transfer fees in Thai baht for cryptocurrencies or digital tokens; and
8. the cost of cryptocurrencies or digital tokens.

The account, together with supporting documents, must be kept as evidence in the event of a tax audit.

The personal income tax exemption shall apply retroactively to the transfer of cryptocurrencies or digital tokens from 14 May 2018 onwards.