Representations of cryptocurrencies are placed on US banknotes in this illustration taken on November 28, 2021. (Photo Reuters)

The revenue department is in talks with digital asset exchanges to allow digital asset exchanges to collect withholding taxes on cryptocurrency profits, department spokeswoman Sommai Siriudomset said.

The move is meant to make trading more convenient.

Buyers of cryptocurrencies are currently required to collect 15% withholding tax on profits made by sellers in each transaction.

Ms Sommai said the department is working on introducing an inorganic law to collect the 15% capital gains tax on profits from cryptocurrency trading.

The department has the power to levy taxes on cryptocurrency transactions, as profits from such activity may be considered taxable income under section 40 of the Royal decree amending the tax code n ° 19.

She said the ministry would calculate the tax only on profitable transactions, not losses.

This means that sellers must record all profitable transactions to determine which ones require withholding tax.

Ms Sommai said the tax also covers Bitcoin mining transactions and dividend or interest from cryptocurrency investments.

Bitcoin mining is considered the same as mining for ore, she said. Therefore, earnings from Bitcoin mining are considered income from commercial, agricultural and industrial operations, which is subject to tax under section 40 (8).

Bitcoin miners can claim expenses incurred while mining for a tax deduction, Ms. Sommai said.

Dividends or interest earned from investments in cryptocurrencies are considered income under section 40 (4) and are subject to tax.

She said the department has deployed a data analysis system to examine tax payments from cryptocurrency trading.

If the department finds an irregularity in tax payment, it has the power to summon related parties, including financial institutions or trading platforms, to provide information.

Sanjay Popli, co-founder of Cryptomind, owner of Merkle Capital, said many investors are still unsure how the income department will calculate crypto trading profits and losses.

He said that it is very difficult to follow the gains of cryptocurrencies because most of the cryptocurrency traders are speculators who usually hold the coins for a very short period of time before selling for profit.

One question that remains is whether crypto trading losses can be deducted from profits, Sanjay said.

It is also not clear whether gains from arbitrage exchanges, in which investors simultaneously buy and sell the same coin listed on different exchanges to profit from price changes in each exchange, will be considered profits. , did he declare.

Akalarp Yimwilai, managing director of Zipmex Thailand, a digital asset exchange, said tax collection can take place, but the department should clarify the criteria for calculating profits so that taxpayers can ensure they are legally imposed.