While most governments struggle with digital asset taxation, Thailand has approved a five-year tax exemption plan that the government says will boost innovation. In neighboring Malaysia, the government has launched a new regulatory sandbox for digital asset firms as the race to dominate the sector in Southeast Asia heats up.
Thailand’s tax exemption
It’s “full speed ahead,” Deputy Finance Minister Julapun Amornvivat stated on X as he announced the tax exemption plan. He revealed that the Cabinet had approved new tax measures to support Thailand’s ambition to become a “Digital Assets Hub.”
“The key point is the exemption of personal income tax on capital gains from the sale of digital assets, provided the transactions are conducted through operators regulated by the SEC, covering the period from January 1, 2025, to December 31, 2029,” he stated.
With the new exemption, the Thai government intends to promote transparent digital asset trading on regulated exchanges and support innovation, the deputy minister says. And while it will erase capital gains, the government expects the increased trading will increase mid-term tax revenue by at least THB1 billion ($30.6 million).
“The main goal of this legislation is to invigorate Thailand’s crypto market, attract foreign investment, boost domestic spending, and potentially pave the way for other forms of taxation, such as Value Added Tax (VAT), in the future,” Amornvivat added.
The $30 million in ‘crypto’ tax revenue would put Thailand at par with countries like Switzerland, Belgium, Norway, and Portugal, according to data from digital asset tax service provider Blockpit. These countries also have attractive taxation policies for the sector; Portugal, for instance, exempts taxation for private individuals who hold their digital assets for more than one year.
Blockpit estimates that the United States collected $1.9 billion in 2023, six times higher than second-placed India at $303 million. Japan, France, and the United Kingdom make up the top five.
Besides the exemption, the Thai tax agency has also pledged to comply with the Crypto-Asset Reporting Framework designed by the Organisation for Economic Co-operation and Development (OECD). The global standard was launched in 2022 and requires exchanges, wallets, and brokers to report all transactions to prevent tax evasion. Over 50 nations signed the agreement in March this year.
“I firmly believe this is another significant step forward in enhancing our country’s economic potential and an opportunity for Thai entrepreneurs to grow on the global stage,” the Deputy Minister concluded.
Meanwhile, the Thai Securities and Exchange Commission (SEC) recently launched a public consultation on the listing criteria for digital assets on local exchanges. The proposed criteria would expand the list of issuers and promote innovation, all while increasing safeguards for investors.
Malaysia launches Digital Asset Innovation Hub
In neighboring Malaysia, the government has launched a Digital Asset Innovation Hub to spur innovation in the blockchain sector.
The hub was launched by Prime Minister Anwar Ibrahim, who described it as an initiative that will spark “deeper collaboration between regulators and industry players,” reports The Business Times.
The new hub provides a regulatory sandbox for both local and international virtual asset service providers (VASPs) to test their products and services before rolling them out to consumers. Top financial regulators, including Bank Negara Malaysia and the Securities Commission, will be part of the project to ensure the products adhere to regulations.
“Our ambition is clear—to align infrastructure, policy and talent, across both the public and private sectors, in pursuit of a digitally capable, future-ready Malaysia,” Ibrahim added.
The premier identified stablecoins backed by the local ringgit, programmable payments, and supply chain financing as the priority areas for VASPs in the hub. Programmable payments, in particular, have been of interest to Malaysia for some time; the country’s central bank digital currency (CBDC), which the central bank has been exploring for years, will support these payments. With the ringgit-backed stablecoin, Malaysia would join dozens of countries pushing for stablecoins backed by their local currencies as USD-backed options dominate the market with a 98% market share.
The central bank has expressed its support for the hub, which Governor Abdul Rasheed Ghaffour says will enable Malaysia “to build a strong foundation for an adaptive and resilient economy.”
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