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Thai Cabinet’s New Tax Exemption Policy to Encourage Investment in ICOs

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According to reports, Thai Finance Minister Rachada Dhnadirek said that the Thai Cabinet had approved the exemption of corporate income tax and value-added tax…

Thai Cabinet’s New Tax Exemption Policy to Encourage Investment in ICOs

According to reports, Thai Finance Minister Rachada Dhnadirek said that the Thai Cabinet had approved the exemption of corporate income tax and value-added tax for companies issuing digital investment tokens to promote the financing of listed and non-listed entities. This exemption applies to the primary and secondary markets of companies and registered entities that issue ICO (initial coffering). Investors of such tokens will also be exempt from VAT. Utility tokens will not qualify for tax exemption.

Thailand provides tax relief for companies issuing investment tokens

Interpretation of the news:


The Thai Cabinet has recently approved a new taxation policy that exempts companies issuing digital investment tokens from both corporate income tax and value-added tax, in a move to encourage investment in Initial Coin Offerings (ICOs). Thai Finance Minister Rachada Dhnadirek confirmed the exemption applies to both primary and secondary markets of companies and registered entities that issue ICOs.

ICOs are a popular way for businesses to raise funds using blockchain technology. They allow companies to issue tokens that represent an ownership stake or a utility within the company and are sold to investors in exchange for cryptocurrency, usually Bitcoin or Ethereum. The idea behind ICOs is to provide a decentralized alternative to traditional fundraising methods that is more accessible and efficient for both businesses and investors.

By exempting digital investment tokens from corporate income tax and VAT, the Thai government hopes to promote the financing of both listed and non-listed entities. This can help support small businesses and startups that may have difficulty obtaining traditional bank loans, allowing them to grow and create jobs.

However, it should be noted that utility tokens will not qualify for tax exemption. Utility tokens are a type of digital token that represent access to a specific product or service, rather than ownership in a company. As they do not provide investment returns, they often do not fall under the same securities regulations as investment tokens.

The move by the Thai government follows a growing trend of countries exploring tax exemptions and regulatory frameworks for ICOs. In 2018, Switzerland established itself as a hub for blockchain startups by introducing the “Crypto Valley” in Zug, which provides a supportive regulatory environment for startups in the industry. In 2019, France introduced a new framework that offers guidelines for ICO issuers and has a focus on investor protection.

In conclusion, Thailand’s new tax exemption policy for companies issuing digital investment tokens is a positive step towards promoting financing and investment in the growing industry of ICOs. While there are still challenges in regulating the industry, the government’s support can help foster innovation and growth in the sector.

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