Many transactions of digital assets have been made through over counter–OTC transactions via individuals in Thailand. The OTC transaction performed by an individual shall be subjected to Thai withholding tax (“WHT“) at the rate of 15% on a capital gain basis provided that such WHT amount shall be handed over to the Revenue Department (“TRD“) monthly via PND 2 form.
For example, Mr. A has acquired digital assets from Mr. B at THB 2,000 per unit, a total of 5 units equivalent to THB 10,000 provided that Mr. B has acquired via the exchange at THB 1,000 per unit. Therefore, Mr. A is obliged to deduct 15% WHT in the amount of THB 750 from capital gain arising from selling the digital assets in the amount of THB 5,000 (10,000 – 5,000) and submit to TRD according to the standard cycle. Such WHT would not be considered as final tax, but Mr. B is obliged to file the annual personal income tax (“PIT“) return provided that such WHT shall be considered the tax credit thereunder.
However, should Mr. A perform the OTC transaction with a corporate entity named the “C Co.” provided that the corporate entity has a capital gain from disposal transaction to Mr. A. Such OTC transactions shall not be subjected to WHT. On the contrary, should the contractual party of the OTC transaction be an individual, the corporate entity is obliged to deduct the withholding tax at the rate of 15% from the capital gain basis like the above scenario.
For example, Mr. A has acquired digital assets from C Co. at THB 2,000 per unit, a total of 5 units equivalent to THB 10,000 provided that C Co. has acquired via the exchange at THB 1,000 per unit. The C Co. shall not be subjected to any withholding tax implications but would be subject to the corporate income tax at 20% on a capital gain basis.
However, should Mr. A and C Co. have conducted the OTC transaction for the benefit of themselves, both shall not require any license to operate the transaction. On the contrary, should both conduct the OTC transaction for the benefit of the third parties, they are obliged to acquire the mandatory licenses from the Security Exchange Commission – SEC according to the prescribed regulations. Should you have any inquiries, please feel free to contact us via [email protected]
