Crypto traders subject to 15% capital gains tax

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Profits from cryptocurrency trading are now subject to a 15% capital gains tax, according to a source from the Finance Ministry.

The ministry recommends investors identify their income from cryptocurrencies when filing tax this year to avoid legal penalties.

In 2022, all taxpayers who gained from cryptocurrencies, including investors and mining operators, are subject to a 15% withholding tax, while digital asset exchanges are exempt from such duties.

The Revenue Department plans to strengthen its surveillance of cryptocurrency trading this year after it saw significant growth in market size and the value of the digital asset market in 2021, the source said.

The department has the authority to collect taxes from cryptocurrency trading as profits from such activity can be considered assessable income under Section 40 of the Royal Decree amending Revenue Code No.19.

Akalarp Yimwilai, co-founder and chief executive of Zipmex Thailand, said many questions remain about how to calculate profits, including whether a gain from a price increase as the US dollar strengthens is considered a profit, he said.

“Tax methods and calculations should be more concise, clear and easy to understand. Many people I know want to pay taxes, but don’t know how to calculate them,” said Mr Akalarp.

“As an exchange provider, Zipmex has been working to develop a system to help our customers calculate profits and losses, but it’s very difficult. If the Revenue Department really has such an advanced data analytics system that it can precisely calculate gains from cryptocurrencies, it would be a great benefit to share it with the industry.”

Anon Thadium, a judge on the Central Tax Court, wrote in an article that any traders with gains from the sales of cryptocurrencies are considered beneficiaries of crypto transactions. This gain is assessable income under Section 40 and must be calculated for personal income tax, said Mr Anon.

It is important that once the seller is subject to withholding tax, the profits from crypto transfers must also be filed for annual income tax returns, as such withholding is not considered a final withholding tax, he said.

Sellers can use the deducted tax as a tax credit for a deduction next year under Section 60 of the Revenue Code, Mr Anon said.