Crypto Tax Declarations in Thailand

Introduction

Thailand’s cryptocurrency market has witnessed remarkable growth in recent years, with the nation boasting one of the highest cryptocurrency ownership rates globally. As digital assets become an increasingly integral part of the investment landscape, individuals and businesses must be aware of the requirements and intricacies of crypto tax regulations. 

Over the recent years the Thai Government has made several changes to how income earned from Cryptocurrency is to be taxed which has led to confusion amongst investors. For example, there has been a lot of confusion as to whether Withholding Tax is to be deducted. This guide will provide a thorough examination of the declaration process for income earned from cryptocurrencies in Thailand in 2024, including the latest regulatory updates, compliance requirements, and tax planning considerations.

Please note, that as the tax filings aren’t due until 2025, these requirements could still be subject to change. We will keep you updated with any news and developments as and when they happen.

What is Crypto Tax?

Crypto tax, refers to the taxation principles applied to revenues involving cryptocurrencies and other digital assets. Although the Thai Revenue Department categorises these digital instruments such as cryptocurrencies as “digital assets,” the tax policies for such assets closely follows the approach taken by other countries i.e. they are a unique form of digital property.

How Established is Thailand’s Crypto Tax Landscape?

Thailand has demonstrated a progressive stance towards cryptocurrency, regularly updating its tax laws to provide clarity and ensure fair taxation. The latest developments in the country’s crypto tax framework include:

Capital Gains Tax

In Thailand, capital gains tax applies to profits derived from the sale or exchange of cryptocurrencies, similar to the taxation of income from other capital assets. The applicable tax rate ranges for individuals that are Thai Tax residents from 0% to 35%, depending on the taxpayer’s total annual income, including earnings from digital assets. Please note that if the crypto is owned by a company registered in Thailand, then they will be subject to corporate income tax instead, which has rates up to 20%.

VAT Exemption

To encourage the adoption of cryptocurrency, the Thai government has exempted transactions involving cryptocurrencies from the 7% Value Added Tax (VAT). This exemption is an important incentive for traders and investors, making digital asset transactions more financially attractive.

What is the Crypto Tax Declaration Process in Thailand?

Ensuring compliance with Thailand’s crypto tax regulations requires a meticulous approach from investors. 

The following steps must be carefully satisfied as part of the crypto tax declaration process:

Step 1: Record and Organise Your Transactions

Maintaining detailed records of all cryptocurrency transactions throughout the year is the foundation of the declaration process. Required details includes logging the following: 

• the date of transaction, 
• type of transaction (purchase, sale, trade, etc.), 
• cryptocurrency involved, 
• transaction amount in Thai Baht, 
• counterparties (if applicable), and; 
• any associated fees or costs.
  
  In practice, the exchange will issue a report which provides a summary of your yearly transactions to facilitate the tax declaration. 

Step 2: Calculate Your Taxable Income

Determining the taxable income from cryptocurrencies involves calculating the gains and losses for each transaction. Taxpayers can choose between the First In, First Out (FIFO) or Moving Average Cost (MAC) methods to determine the cost basis of their digital assets.

For capital gains, the difference between the acquisition cost and the sale price is treated as taxable income. Losses from one type of cryptocurrency can be offset against profits from other types, provided the transactions were conducted through digital asset exchanges approved by the Thai Securities and Exchange Commission (SEC).

Step 3: Fill Out Tax Forms

Individuals must report their net cryptocurrency gains on the personal income tax return forms P.N.D. 90 or P.N.D. 91, depending on their tax status (salaried employee or business owner).The complete reporting of all relevant information is essential in order to avoid discrepancies and potential legal issues.

Step 4: Submit Your Tax Declaration

The tax return must be filed by March 31st, 2025 for the crypto revenue earned in 2024 (April 6th for E-filing). Taxpayers can also choose to use the electronic filing system offered by the Thai Revenue Department. E-filing is considered more secure and convenient for the submission process and digital copies of the documents can be submitted, rather than physical.

Step 5: Maintain Records for Future Reference

Retaining all records of cryptocurrency transactions and tax filings for at least five years is also required. These documents serve as important evidence during any potential audits and investigations and help ensure ongoing compliance as crypto tax regulations evolve.

What are the Compliance Requirements for Crypto Tax Declaration in Thailand?

Satisfying all the compliance requirements established by the Thai Revenue Department is equally important for maintaining transparency and facilitating the monitoring of digital asset movements. These key compliance measures include:

Transaction Reporting

All significant cryptocurrency transactions must be reported to the Thai Revenue Department, regardless of the transaction value or nature. The specific reporting thresholds (currently transactions over 1.8 million THB ($58,000)) and details required are periodically updated, so investors must stay informed about any changes. This report will be made by either the exchange or the bank upon receiving a transaction that meets or exceeds the 1.8 Million THB threshold.

Record-Keeping

Effective record-keeping is a basic and important requirement for both compliance and financial management of any cryptocurrency transactions. Taxpayers must maintain complete records, including: 

• transaction timestamps, 
• wallet addresses, 
• exchange records, fair market values in Thai Baht, and 
• receipts of associated costs or fees, for at least five years.

How can you Prepare Your Crypto Tax Planning?

To navigate the complexities of crypto taxation in Thailand, adopting strategic tax planning should always be considered. Here are some advanced strategies to consider:

Long-term vs. Short-term Gains

While Thailand currently does not differentiate between long-term and short-term capital gains tax rates for cryptocurrencies, understanding the impact of holding periods on tax liabilities in general can be useful for optimising your tax situation.

End of Fiscal Year Planning

Timing the realisation of gains and losses to coincide with the end of the fiscal year can help manage taxable income levels. It is often beneficial to realise losses at the end of the year to offset any capital gains.

Tax Loss Harvesting

This strategy involves deliberately selling cryptocurrencies at a loss to offset capital gains made elsewhere in your portfolio, effectively reducing your overall tax liability.

Can I Offset My Losses From Cryptocurrency Transactions to Reduce My Tax?

Yes, it is possible to offset losses from cryptocurrency transactions to reduce taxable income and personal income tax liability in Thailand.

According to the Thai Revenue Department’s guidelines on taxation of cryptocurrency transactions, taxpayers are allowed to deduct losses incurred from cryptocurrency trading against gains from cryptocurrency transactions in the same tax year.

The specific rules are as follows:

Capital Gains and Losses:

Gains or losses from the sale/exchange of cryptocurrencies are treated as capital gains or losses for tax purposes.

Offsetting Losses:

Taxpayers can offset capital losses from cryptocurrency transactions against capital gains from other cryptocurrency transactions in the same tax year.

Carrying Forward Losses:

If the capital losses from cryptocurrency transactions exceed the capital gains in a particular tax year, the excess losses can be carried forward to offset against future capital gains from cryptocurrency transactions for up to five consecutive tax years.

No Offset Against Other Income:

Losses from cryptocurrency transactions cannot be offset against other types of income, such as employment income, business income, or rental income.

It’s important to note that taxpayers must keep proper records and documentation of their cryptocurrency transactions, including trade details, dates, amounts, and valuations in Thai baht, to support the calculation of gains or losses for tax purposes.

Additionally, taxpayers are required to report their cryptocurrency gains or losses in their annual personal income tax return (Form P.N.D. 90 or 94*) and pay any applicable taxes in order to claim such offsets.

*A PND 94 is a form used in Thailand for filing and paying personal income tax for the first six months of the year. It applies to individuals with income that isn’t salary-based, such as:

• Income from renting properties (land, houses etc.)
• Gains from investments
• Commissions
• Copyright royalties
• Dividends

Please note there is a threshold for filing a PND 94. If your non-salary income from January to June exceeds 60,000 baht, you’ll need to file this form. The filing deadline is between July 1 and September 30 of the same tax year.

Our Thoughts

Thailand has been proactive in regulating cryptocurrency, offering positive arrangements such as exempting it from value-added tax (VAT) and removing withholding tax requirements. However, crypto investors need to be careful about tax obligations, as exchanges registered in Thailand are required to track and report data to authorities. Transactions above US $58,000 baht (approximately 1,800,000 THB) may trigger an automatic notification to Thailand’s Revenue Department for potential tax liabilities. 

Please note that this article is for information purposes only and does not constitute legal advice.