Thailand axing taxes on startups and cryptocurrencies
Tech experts in Thailand are predicting thousands of startups will launch this year thanks to a government decision to waive capital gains taxes on investments in startups, a move that analysts have been advocating to help expand the local ecosystem.
The Digital Council of Thailand (DCT), which is private industry group, had lobbied for the tax changes with the Revenue Department, National Innovation Agency (NIA) and Securities and Exchange Commission (SEC).
Thailand recently spawned its first two unicorns – startups with reach valuations of $1 billion or more – but digital economy experts and entrepreneurs had been saying that the old tax regime was uncompetitive compared to some other countries in the region.
Sam Tanskul, Managing Director at Krungsri Finnovate, a corporate venture capital arm under Bank of Ayudhya, said that Thailand was one of very few countries that had applied a capital gains tax to startup investments. That tax is waived in Singapore, the U.S. and European countries because of the risks associated with startups.
“The DCT is convinced the capital gains tax waiver and other promotion measures would be able to create 5,000 new startups in 2022, which would be vital in the country’s economic recovery,” said Suphachai Chearavanont, President of the Council and CEO of TRUE, a major internet and digital services provider.
“This is a success and a stepping-stone to attract both local and foreign investors and add more value to the country’s economy,” Suphachai said.
Meanwhile, the Revenue Department said that it plans to ease tax rules for investments in digital assets. The plan is to allow traders to offset annual losses against gains for taxes owed on cryptocurrency investments, and exempt transactions from withholding tax and value-added tax.