Thailand VAT Exemption on Cryptocurrency & Digital Token Transfers: Latest Updates

VAT exemption on specific cryptocurrencies and digital tokens activities is not new. However, it has changed and evolved in recent years in Thailand, where the newest changes occurred in late September with the publication of Royal Decree No. 778 (Royal Decree).

The adoption and implementation of the Royal Decree are not surprising since the Thai government approved the draft earlier this year.

Development of the VAT Exemption

For the past ten years, the Thai government has changed and updated rules relating to VAT exemption of cryptocurrencies and digital token activities. From 2014 to 2018, the exemption applied to the transfer of digital investment tokens by a Thai corporation to the public. 

The next phase brought VAT exemption rules that applied from April 2022 to December 2023 to transfer licensed cryptocurrency and digital utility tokens to digital assets. 

Earlier this year, the Thai Cabinet announced the introduction of new VAT exemption rules, which will be retroactively applied starting January 1, 2024. As stated in the draft Royal Decree, which was later adopted and published on September 24 in the Official Gazette, VAT exemptions are extended to cryptocurrency or the utilization of digital token transfers for use in the digital asset trading center, made through or by a digital asset broker. 

In addition, the transaction is VAT-exempt if the transfer is made to a digital asset trader under the conditions stated in the Digital Asset Businesses Act.

Furthermore, the Royal Decree clarifies the term “utilization digital token" as tokens for establishing the right to acquire goods, services, or any other specific right.

Conclusion

The Royal Decree came into force on September 25, 2024, and marks a significant milestone in developing the cryptocurrency taxation legal framework. With this regulation in place, the Thai government shows its determination to tackle the complexity that crypto and digital assets taxation presents.

Source: Thailand Royal Decree 788, Deloitte, Bloomberg, Sherrings