Today, Reuters reported that Thailand’s cabinet agreed to tax breaks for corporates that issue investment tokens. The taxes include corporate income tax and value added tax. Thailand distinguishes between many types of tokens, so the primary beneficiaries of this tax break are likely to be property developers for real estate tokenization.
The Deputy Government Spokesman Rachada Dhnadirek estimated that in the next two years, there would be 128 billion baht ($3.6bn) worth of investment token offerings in Thailand, resulting in foregone tax revenue of 35 billion baht ($1 bn).
Investment tokens are a narrow class of digital assets and do not include tokenized securities which are regulated along with conventional securities. It also excludes utility tokens and cryptocurrencies that don’t provide ownership rights.
So what is an investment token? It has to give rights to the investor in a project or business – but not be a security. The most common category is likely to be real estate and the Securities and Exchange (SEC) Commission has published regulations specifically for this asset class.
The SEC has licensed several businesses involved in cryptocurrencies or digital tokens. So far, it has approved only three exchanges purely for digital tokens ( utility and investment tokens), with only one active. Two of them primarily offer real estate tokens. The third is TDX, the digital asset subsidiary of the Stock Exchange of Thailand (SET), which has yet to launch its exchange.
Last year the SEC and other government departments ruled that cryptocurrencies could not be used as a means of payment. SCBX, the holding company of Siam Commercial Bank, had planned to acquire the largest Thai cryptocurrency exchange Bitkub, but the deal was terminated as a result of the SEC requiring the exchange to address some regulatory issues.