On 13 May 2018, the Royal Decree on Amendment to the Revenue Code (No. 19) (“Royal Decree No. 19”), B.E. 2561 was published in the Government Gazette, and became effective on the following day.
Keywords: Mazars, Thailand, Tax, Royal Decree, Revenue Code, Digital Asset, Cryptocurrency, Digital Tokens
12 June 2018
Royal Decree No. 19 does not provide a definition of cryptocurrency and digital tokens. The definition of both terms is provided in the Royal Decree on a Digital Asset Business, B.E. 2561. Royal Decree No. 19 only adds 2 subcategories of assessable income under Section 40 (4) of the Revenue Code, as follows:
- The share of profits or any benefits of a similar nature derived from holding or possessing digital tokens (Section 40 (4) (g)); and
- The benefit derived from the transfer of cryptocurrency or digital tokens which exceeds the cost of the investment (Section 40 (4) (h)).
Royal Decree No. 19 specifies that the payment of assessable income under Section 40 (4) (g) and (h), is subject to 15% withholding tax. This withholding tax requirement is added to Section 50 of the Revenue Code (Section 50 (2) (f)). The 15% withholding tax shall apply to both resident and non-resident individuals.
As there is no option to exclude assessable income under Section 40 (4) (g) and (h) from the annual personal income tax return, individual taxpayers will also be required to include such income in their annual personal income tax returns. The 15% withholding tax should be creditable against their tax liability.
Currently, there is no law specifying the withholding tax on capital gains and benefits from digital asset transactions made by corporate entities.