CRYPTO ASSETS CAPITAL GAINS TAX
After several public hearing sessions and comments from different stakeholders, the Thai Revenue Department (RD) has finally launched the first official guidelines governing the personal income tax on cryptocurrency and digital trade, which applies to the year 2021. The guidelines present exhaustive technical models for the calculation of the assessable income derived from cryptocurrencies and digital tokens. The guidelines provide (i) a definition of cryptocurrency and digital token, and (ii) elaborate on the taxation of cryptocurrencies and digital tokens, which are categorized into five types, depending on how the taxable income is derived (trading, mining, remuneration, gift, return on investment). Cryptocurrencies and digital tokens can be defined as follows: “Cryptocurrency” refers to electronic data built on systems or electronic networks to be used as currency for the exchange of goods and services, in compliance with the regulations of Thailand’s Securities and Exchange Commission (SEC).
paying taxes according to the procedures specified in the Thai Revenue Code. 1. Cryptocurrency Trading
“Digital Token” refers to digitally recorded instruments built on systems or electronic networks, which have an intrinsic value and grant their holders rights to tradable assets or utilities.
The income derived from trading (exchanging, selling, transferring, or disposing of cryptocurrency) is regarded as assessable income under Section 40 (4) (g) of the Revenue Code Amendment Act (No. 19)[1].
Cryptocurrency Taxation
Calculation of a cryptocurrency’s price:
According to the guidelines announced by the Revenue Department (RD), the taxation of cryptocurrencies and digital tokens can be categorized into five types. Each type represents a different approach on how the assessable income is taxed. Any taxpayer who falls under one of these conditions is subject to
1. The First In, First Out (FIFO) method assumes that cryptocurrencies or digital tokens purchased first are sold first. Hence, capital gains in each transaction are calculated based on the prices of the oldest cryptocurrencies in a portfolio. For example, an investor purchases 200 XYZ coins on Monday at a cost of $1 each, and 200 more on
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