The Thai Ministry of Finance recently announced a revolutionary change in its tax policy, exempting domestic #cryptocurrency trading from the value-added tax (VAT). This move signifies a significant shift towards a more favorable stance on cryptocurrencies, albeit with uncertainties for foreign investors.
Proposal for Digital Assets
According to data published in the Bangkok Post on February 7th, Secretary of the Ministry of Finance, Paopoom Rojanasakul, emphasized the ministry's effort to promote digital assets as a new tool for fundraising.
Changes in Tax Regulations
The new government has decided to make changes in tax regulations concerning cryptocurrencies. The 7% VAT previously required on income from cryptocurrency trading has been suspended. This tax exemption came into effect on January 1st, 2024, without specifying a definitive end date for its validity.
Exemption Also Applies to Crypto Exchanges
The VAT exemption not only applies to the transactions themselves but also to regulated cryptocurrency exchanges, brokers, and dealers under the supervision of the Thai Securities and Exchange Commission.
Thailand's Potential as a Crypto Hub
The Post emphasized that the new tax policy could support Thailand's growth as an offshore crypto hub and attract further investors to the country's digital ecosystem.
Uncertainty for Foreign Investors
Despite these positive steps, uncertainty remains for foreign investors. In September, the government issued a new decree stating that foreign income from cryptocurrency trading is subject to personal income tax if acquired in Thailand.
Challenges for Foreign Investors
Accessing Thai cryptocurrency exchanges is also becoming more challenging for foreign investors, partly due to the lack of opportunities to obtain a national digital identity, which is necessary for opening a trading account.
Conclusion
While Thailand is taking measures to support the domestic cryptocurrency market, foreign investors remain on the sidelines facing obstacles. It is evident that despite efforts towards regulation and support, challenges persist that hinder full engagement in Thailand's crypto market.
#tax

Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“

 

President Joe Biden's budget proposal, which aims to "limit mining activity," might eventually subject cryptocurrency #miners in the United States to a 30% #tax on electricity bills.

Any company using resources, whether they are owned or rented, would be "subject to an excise tax equal to 30% of the costs of power used in digital asset mining," according to a Department of the Treasury supplementary budget explanation paper published March 9.

It was suggested that the tax would go into effect after December 31 and would be phased in over three years at a rate of 10% each year, rising to the top tax rate of 30% by the third year.

The "amount and type of electricity used as well as the value of that electricity" would be subject to reporting requirements for cryptocurrency miners.

#crypto miners who obtain their electricity off-grid would still be liable for the tax and would need to calculate the cost of any "electricity generating plant" output.

Treasury cited "negative environmental effects," "increased pricing for individuals using a grid shared with the operations," and "uncertainty and hazards to local utilities and communities" as reasons for the tax.

“An excise tax on electricity usage by digital asset miners could reduce mining activity along with its associated environmental impacts and other harms.”

The White House acknowledged in a statement on March 9 that it is looking to stop a tax plan for cryptocurrency transactions that it thinks would earn $24 billion.

The tax-loss harvesting practice of selling digital assets at a loss for tax reasons and then buying them again right away is permitted under current regulations for cryptocurrency investors.

The new regulations would align #cryptocurrency trading tax laws with those governing stocks, where such a tactic is prohibited by wash sale regulations.

The International Monetary Fund (IMF) has urged Pakistan, specifically its Federal Board of Revenue (FBR), to start imposing capital gains tax on cryptocurrency investments. This move is part of the requirements for unlocking a $3 billion bailout package aimed at stabilizing the country's economy.
Expansion of Taxation Requirements
In addition to cryptocurrencies, the IMF has recommended Pakistan to adopt stricter measures for collecting taxes on property transfers and other capital assets. These recommendations include the need to revise property and securities taxation, potentially leading to the introduction of new tax rules for the real estate market.
Implications for the Real Estate Market
If the IMF proposal is accepted, property developers could face stricter rules regarding transaction monitoring and reporting, accompanied by hefty fines for non-compliance. This aims to ensure fairer and more transparent tax collection on property transactions.

Plan for AI Integration in Pakistan
In line with other initiatives, Pakistan plans to enhance its capacities in the field of artificial intelligence (AI), aiming to train one million IT specialists in this area by 2027. For this purpose, the country is considering establishing a National Artificial Intelligence Fund to finance educational and research projects in AI.

Conclusion and Outlook
If Pakistan adopts the IMF's proposals, it could have a significant impact on the local economy and regulatory environment. The introduction of a tax on cryptocurrency profits and stricter regulation of the real estate market could represent a significant step towards stabilizing the country's financial situation, albeit with potential impacts on investors and developers. Meanwhile, plans for AI development demonstrate Pakistan's efforts to strengthen its position in the global technological sphere.
#crypto #IMF #tax

Notice:
,,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“