Thailand is set to start taxing foreign earnings from cryptocurrency trading beginning in 2025, closing a loophole that previously allowed residents to bring overseas income into the country tax-free.
The new tax rules come from Thailand’s Revenue Department as part of efforts to fund proposed economic stimulus measures, per a Bangkok Post report. Last month, Thailand introduced a “digital wallet” scheme estimated to cost 560 billion baht to stimulate its economy.
Legal experts note the rules target three groups: Thai residents trading on foreign stock markets via overseas brokerages, cryptocurrency traders, and local/foreign nationals residing in Thailand over 180 days annually.
They also affect “Thais who have been exploiting a loophole that allowed them to bring foreign earnings into the country tax-free after keeping it in an offshore account for more than a calendar year,” the report stated.
The new regulations take effect on January 1, 2024, enabling authorities to tax foreign income starting in 2025. Previously, Thailand only taxed foreign income for residents when remitted in the same year it was earned.
Per an anonymous Finance Ministry source: “The principle of tax is that you must pay tax on income you earn from abroad no matter how you earn it and regardless of the tax year in which the money is earned.”
Experts warn the crypto taxes could deter foreign investors who may view Thailand’s regulations as uncertain. The rules may also worsen income inequality, as Thailand already has the highest inequality in East Asia per World Bank data. While aimed at increasing revenue, the complicated new guidelines could negatively impact foreign direct investment.
