The Thai Revenue Department (RD) has recently published concrete guidelines on how to calculate and tax profit incurred from cryptocurrency trades. This has come after considerable criticism over the personal income tax for cryptocurrency trades, announced in January 2022.
The guidelines provide that taxes can be calculated in two key ways:
✓ First-In, First-Out (FIFO) method; or
✓ Moving Average Cost method.
The tax amount shall be calculated by each coin type. Once a certain method is selected, the calculation must be used throughout that taxable year. Traders can swap approaches in the subsequent tax year. The FIFO method refers to the calculation of assets sold in a chronological order, as they were bought (incidentally, this is the method the IRS recommends in the U.S.A.). The moving average cost method refers to the calculation of the unit cost each time assets are accepted versus the calculation the cost of clearance at the end of the period.
Per the recent guidelines, the RD allows the costs (e.g., platform fees, brokerage commissions, original price of the coin purchased/derived crypto currencies) to be deducted. This is in contract to its previous announcement, which noted that the taxable income will be calculated entirely from the capital gain of each transaction, without considering the cost or the loss incurred throughout the trading year.