Can Thailand Compete With Hong Kong By Eliminating Crypto Tax?

Several Asian countries are doing everything they can to strengthen their competitive position and attract cryptocurrency companies. Earlier this year we wrote about developments in Hong Kong, the UAE and Singapore, and now Thailand is joining them.

Thailand is abolishing the tax on ICOs, a way for companies to grow cryptocurrency. The only exception to this is utility tokens.

Thailand pays 1 billion in taxes

Thai cabinet members have decided that companies that raise money through ICOs can also raise money through bonds, Rachada Dhnadirek, member of the executive committee, told the Bangkok Post. You are exempt from tax.

This means the Thai government will lose about $1 billion in taxes over the next two years (out of an estimated $3.7 billion). It is not known whether companies raising money through ICOs are required to provide information to Thailand’s Securities and Exchange Commission, AFM Thailand says.

According to The Bangkok Post, 57 crypto companies have entered Thailand, and the number is growing despite a government banning crypto payments due to financial stability risks.

No cryptocurrency sales tax

Thailand banned crypto payments last year but allowed crypto investment and trading. The decision was made in March last year and crypto payment providers had 30 days to cease operations.

After the introduction of the new tax exemption, crypto companies in Thailand will be able to issue tokens without tax on primary or secondary sales.

According to Daniel Howitt, CEO of tax firm Recap, the tightening of crypto regulations will determine whether Thailand can become an Asian crypto hub.

Like many other countries, Thailand is tightening its rules on cryptocurrency trading and promoting digital assets. With stricter regulations, it will be interesting to see if this helps or hinders Bangkok’s position as a crypto hub in the coming months,” Howitt told the Bangkok Post.

Utility tokens are excluded

However, it was also announced that utility tokens would not be part of the new exemption. This is because the value of Utility Tokens is tied to the marketing efforts of their issuers.

Utility tokens are cryptocurrencies that have the function of using a specific product or service. This means that the buyer of a utility token has already paid the issuer to enable the company to develop a product that the buyer can buy back for that service at a later date.

Hong Kong is coming

In Asia, Hong Kong seems to be benefiting from tighter regulations in Singapore.

Last year, the Monetary Authority of Singapore released consultation papers to propose stricter rules for client funds held on cryptocurrency exchanges. These consultations are expected to be largely completed in the first half of 2023.

In addition, Singapore wants cryptocurrency companies to take the same security measures as banks.

On the other hand, Hong Kong has embraced crypto again. Hong Kong will be open to investment again in a few months, which means that Chinese investors can invest their money in cryptocurrencies through Hong Kong.

Significant investment is likely to be required if Thailand is to compete with Hong Kong. The Hong Kong government has pledged $6.4 million annually to Web 3 companies.

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Source: Btc Direct

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