Royal Decree Proposal: Tax Exemption for Digital Investment Tokens to Drive Economic Growth in Thailand

The Cabinet has approved the draft principles of a Royal Decree in accordance with the Tax Law on Tax Exemption (Draft No. …) B.E. …, as proposed by the Ministry of Finance (MOF), and has instructed the Office of the Council of State to proceed with further actions.

The proposed Royal Decree by the Ministry of Finance entails significant measures regarding the exemption of personal income tax for dividends or any other benefits received from holding or possessing digital investment tokens. Additionally, personal income tax deduction (at a rate of 15 percent) at source has already been applied, obviating the need for individuals to include such dividends in their annual income tax calculations. Typically, taxpayers are required to include such dividends in their annual income tax calculations and file a Personal Income Tax Return (PND 50) again at year-end. Furthermore, for dividends or benefits received since January 1, B.E. 2567 (2024) onwards, the said dividends are not required to be included in the calculation of personal income tax, aiming to elevate the supervision of digital investment tokens to a standard closer to securities. (Investing in securities, when receiving returns in the form of dividends or interest and having already deducted taxes at source (at a rate of 10 percent), investors have the option to include dividends in their annual income for tax calculation or not).

Moreover, this initiative aims to promote and develop the digital economy of the country by utilizing technology to facilitate fundraising, as well as to align with the government’s policies on promoting and developing the digital economy.

The Ministry of Finance has reported estimated revenue losses and benefits expected to be received, as per Sections 27 and 32 of the Revenue Discipline and Treasury Discipline Act B.E. 2561 (2018), estimating that the aforementioned measures may lead to an approximate annual loss of personal income tax revenue of about 50 million Baht. However, it is anticipated that these measures will provide businesses with an alternative means of raising capital through digital investment tokens in addition to traditional fundraising tools (debt and equity securities), which will have positive implications for fundraising, investment, and employment in the country, as well as support and promote Thailand to become a Digital Asset Hub.

The Office of the Securities and Exchange Commission (SEC) forecasts that in B.E. 2567 (2024), fundraising through digital investment tokens for investment purposes could reach up to 18,500 million Baht.

Key points of the draft Royal Decree are summarized as follows:

Thailand Extends Tax Relief Measures to Foster Digital Asset Trading

Income Tax and VAT Exemption for Investment Token Transfer

Thailand Enhances Regulatory Oversight for Digital Token Offerings