ThailandThe Revenue Department of Thailand is set to implement significant changes to its tax regulations, targeting individuals residing in the country for more than 180 days. Effective January 1, 2024, the new rule will require these residents to declare and pay personal income tax on foreign revenues, including income generated from cryptocurrency trading. Taxpayers will submit their first tax forms reflecting overseas income in 2025, marking a shift from the previous system where only foreign income remitted to Thailand in the same year of earnings was taxable.
Closing the income tax loophole
Under the previous tax framework, individuals were only required to pay taxes on foreign income that they remitted to Thailand during the year in which it was earned. The updated regulation aims to close this tax loophole by mandating that all income earned abroad must be declared, regardless of whether it was intended for use within the local economy.
A Finance Ministry official explained this rationale, stating,
“The principle of tax is that you must pay tax on income you earn from abroad no matter how you earn it and regardless of the tax year in which the money is earned.”
The new tax policy is expected to affect a wide range of individuals, including residents engaged in foreign stock market trading through foreign brokerages, cryptocurrency traders, and Thais holding offshore accounts. This comprehensive approach signifies the Thai government’s commitment to ensuring that all forms of overseas income are accounted for and subject to taxation.
Thailand’s regulatory approach to cryptocurrency
In July, Thailand’s Securities and Exchange Commission (SEC) introduced regulations targeting the digital asset industry. These regulations mandated digital asset service providers to provide sufficient warnings about the risks associated with cryptocurrency trading. Additionally, the SEC banned all forms of cryptocurrency lending services within the country.
Despite the recent stringent regulations, there may be potential changes in Thailand’s regulatory approach to the cryptocurrency industry. The election of Srettha Thavisin, a prominent real estate tycoon, as the new prime minister has raised expectations for a more crypto-friendly environment.
Srettha Thavisin’s notable involvement in a $225 million fundraising effort for XSpring Capital, an investment management firm with a crypto-friendly focus, has garnered significant attention. Furthermore, the firm issued its own token through XSpring in 2022, demonstrating a clear interest in the cryptocurrency space.
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