Thai Regulation | Fundraising without hassle! Companies issue "investment tokens" tax-free

According to Reuters, the Thai government has agreed that companies issuing "investment tokens" for fundraising will be exempt from corporate income tax and value-added tax. Rachada Dhnadirek, a spokesperson for the Thai government, stated that "investment tokens" will serve as an alternative to traditional corporate bonds to help companies raise funds.

Thailand Promotes Industry Development, Actively Improves Tax System

The Thai government estimates that in the next two years, there will be $3.71 billion worth of investment token offerings, and government tax revenue will correspondingly decrease.

This initiative is due to the growing prominence of cryptocurrencies in Thailand in recent years. The country's Securities and Exchange Commission has begun regulating digital assets. Earlier in 2022, there were discussions about imposing a 15% capital gains tax on investors and node operators, which was soon revoked, and traders were exempted from value-added tax on authorized exchanges in Thailand. Finance Minister Arkhom Termpittayapaisith stated that the relaxation of tax regulations for digital asset investments is aimed at helping promote and develop the crypto industry. This tax law will be effective from April 2022 to December 2023.

However, the Thailand Securities and Exchange Commission does not agree with using cryptocurrencies as a means of payment to prevent any impact on financial stability and the economy. It has also proposed a regulatory framework for Virtual Asset Service Providers (VASPs) to manage risks. Existing entities must complete improvements within six months after the enforcement on January 16, 2023.

Japanese Corporate Financing Issuance, Tax Reform in Progress

Under the current regulations, Japanese startups issuing cryptocurrencies are taxed based on the market price of the tokens they hold, even if they are not sold, in addition to the proceeds from sales. Regulatory bodies such as the Financial Services Agency are currently considering alternative systems. Tokens held by issuing companies are not taxed unless profits are realized from sales. The goal is to support the growth of startups and prevent capital flight. In summary: The Japanese government aims to prevent startup capital flight and is considering reducing cryptocurrency taxation: Corporate Token Issuance Tax Exemption