Korn urges Revenue Department to postpone cryptocurrency trading taxes

Korn, a former finance minister, said the department should allow stakeholders to propose ideas and it should take more time to study the best way to collect taxes on cryptocurrency before it issues new regulations.

The department last week announced its plan to collect 15 per cent withholding taxes on transactions involving cryptocurrencies. The department said the loss from previous and future trading could not be cited for tax deduction. Profit from the trades throughout the year would also be added as income for paying yearly income tax, the department said.

Revenue Department director-general Ekniti Nitithanprapas said on Monday that his agency was discussing cryptocurrency tax guidelines with the Bank of Thailand, the Securities and Exchange Commission and other bodies and it was likely to issue tax rules on the crypto trade by the end of this month.

Korn said the department should also study taxing methods of other countries before making a final decision.

Apart from the capital gains tax (CGT), Korn said, traders and crypto exchange operators would also ask the department to clarify its plan to collect VAT when cryptocurrencies are used to buy goods.

Korn said the department should go in for VAT exemption when vendors accept cryptocurrencies for their goods or services because there will be double VAT charges – on goods or services as well as on the exchange of crypto into baht.

Korn cited three main issues for the department to study:

1) VAT and Goods and Services Tax: He said Singapore, Australia and some EU nations exempt VAT on the use of cryptocurrencies to buy goods and services.

2) Capital Gains Tax: Korn said several Asian countries, including Singapore, Malaysia and Hong Kong, do not collect CGT from cryptocurrency trading. He said these countries allow traders to calculate their profits or losses before paying annual personal income taxes.

3) Tax exemption: Korn noted that South Korea initially planned to collect 20 per cent tax on trading of cryptocurrencies with exemption for the first 2.5 million won earned. The rule was delayed to 2023 following strong opposition. Korn said the Revenue Department should also consider an amount that would be exempted from tax, such as the first Bt100,000 earned from trading in cryptocurrency.

“I don’t agree with the plan to collect this tax until the Revenue Department can clear all the doubts as mentioned,” Korn argued.

“It must also make clear how it will manage a fair tax collection from all people involved,” he added.