"Miners, Save This! Pro-Level Tax Management for Cryptocurrency"

Cryptocurrency mining in Thailand involves specific tax implications as outlined below:-

1. Receiving Cryptocurrency from Mining

• Not Taxable Immediately:

  At the time of receiving mined cryptocurrency, it is not classified as “assessable income” under Thai tax law. Thus, no tax is imposed at this stage.

2. Taxation upon Disposal or Transfer

• Assessable Income under Section 40(8):

  When mined cryptocurrency is sold, transferred, or exchanged, it becomes assessable income under Section 40(8) of the Thai Revenue Code.

• Deductible Expenses:

  Miners can deduct expenses such as electricity costs, computer maintenance, and asset depreciation (e.g., hardware). Proper documentation must be maintained.

3. Cost Basis Calculation

• Methods Available:

  Miners can choose between two primary methods for cost calculation:

  • FIFO (First-In, First-Out): Cost is based on the order of receipt.

  • Moving Average Cost: Calculates the average cost of all mined coins.

• Consistency Required:

  The chosen method must be applied consistently throughout the tax year.

4. Cryptocurrency Valuation

• Determining Value:

  Value is based on either the price at the time of receipt or an average price on that day, sourced from a credible exchange.

5. Depreciation of Assets

• Deductible Depreciation:

  Relevant assets, such as computers used for mining, can be depreciated over time according to legal guidelines.

Tax Guidelines for Cryptocurrency and Digital Tokens

1. Income from Holding Digital Tokens

• Examples:

  Yield farming, staking rewards.

• Taxation:

  Income or benefits from holding digital tokens are assessable under Section 40(4), such as profit shares or similar benefits.

• Cost Basis and Income:

  • Value determined at the time of receipt or average price that day.

  • Method chosen must be consistent throughout the tax year.

• Subsequent Disposal:

  Initial taxable value can be used as the cost basis when calculating tax on sales or transfers later.

2. Income from Holding Cryptocurrency

• Examples:

  Yield farming or staking rewards.

• Taxation:

  Income is classified as assessable income under Section 40(8) for commercial or other business income not listed under Sections 40(1)–(7).

Types of Cryptocurrency Income

1. Mining Income: Classified as assessable income under Section 40(8), with deductible expenses for actual mining costs.

2. Profits from Sales or Transfers: Net profit (sale price minus cost) is assessable income under Section 40(4).

3. Benefits from Usage: Income from staking or yield farming is assessable under Section 40(8).

Tax Filing Guidelines

1. Annual Filing:

   • Report income derived from cryptocurrency in Form PND 90/91.

   • Use relevant income categories such as:

     • Section 40(1) for salaries or employment contracts.

     • Section 40(2) for general contractual income.

     • Section 40(4) for investment income.

     • Section 40(8) for business-related income.

2. Withholding Tax Credit: Taxes withheld during the year can be used as a credit when filing annual taxes.

   
   

Practical Recommendations

1. Documentation: Always retain evidence, including receipts, exchange statements, and tax-related documents, for accurate cost and tax reporting.

2. Consult Professionals: For complex cases involving cryptocurrency or digital tokens, consult a tax advisor to ensure compliance and optimal tax management.

   
   

For further assistance, visit Local Thai Tax.

Credit: Revenue Departments