Recently, Thailand’s government proposed a regulation about tax income from foreign assets, including crypto from any person who resides in Thailand for up to 180 days. Following the previous regulation, only foreign income remitted to Thailand in the year of earning was taxed. The new rule closes this loophole and will oblige an individual to declare any income earned overseas, even if it wasn’t going to be used in the local economy.
Who will be targeted and why?
According to legal experts, the policy appears to have three specific targets: Residents trading in foreign stock markets through foreign brokerages, cryptocurrency traders and Thais who use offshore companies to store profits to carry out tax evasion
The proposal to promulgate these new regulations stems from the demand of economic growth and lower income inequality in Thailand. The government will tighten loopholes in its tax rules on overseas income as well as raise revenue to pay for measures to stimulate the economy.
When will this policy take effect and how effective will it be?
The new rule, which will take effect on Jan 1st , 2024, will enable authorities to tax the foreign income of individuals in 2025. However, the new regulation also brings up questions about whether this is the most effective way to generate revenue for Thailand. Especially in the field of cryptocurrency, where Thailand’s current method of assessing income from cryptocurrency is still quite vague and has no specific legal basis.
Some experts believe that in the long run, these new policies can neither achieve the government’s fair goal, but also aggravate the gap between the rich and the poor, as many wealthy individuals will have the ability to evade tax obligations while of course the real tax that the government collects only comes from the poor who actually participate in the cryptocurrency market.
In summary, the issuance of these new tax policies may not be effective in the field of cryptocurrency, profits from cryptocurrency investment may not be converted by users into fiat currency, making it difficult for the government to assess tax rates. Therefore, the Thai government should first publish specific tax guidelines for the cryptocurrency investment, then publish tax policies for this activity