THE INSUFFICIENCY OF LEGAL PROVISIONS UNDER THE REVENUE CODE IN REGULATIONG ASSESSABLE INCOME DERIVED FROM TRANSACTIONS INVOLVING DIGITAL ASSETS.

Abstract

Transactions involving digital assets originate with the concept of creating a decentralized financial system to revolutionize traditional finance through a new digital network. The nature of the transaction model still resembles traditional financial systems, as in creating digital assets through crowdfunding, buying or exchanging digital assets, and lending and depositing digital assets in the system. Such transactions create assessable income that must be collected as tax, the importance of which the governmental sector is cognizant. It was necessary to amend the Revenue Code by enacting the Emergency Decree on Digital Asset Businesses B.E. 2561 (2018) to address personal income tax collection for holding digital tokens according to Section 40(4)(h) and transferring cryptocurrencies or digital tokens with Section 40(4)(i) of the Revenue Code. In addition, the Revenue Department also issued guidelines for paying personal income tax on cryptocurrency digital tokens in a manual determining income types from different transactions to clarify tax collection procedures.

However, these tax collection methods still encounter problems with legal provisions that fail to cover all types of income in the investment stream. Therefore, principles of personal income tax collection from transactions related to digital assets were studied as well as related problems arising along with a comparative analysis of tax collection measures in the United States of America, Australia, and Singapore to determine appropriate assessable income types. Potential solutions are suggested by requiring amendments to the Revenue Code to specify income types to clarify and include diverse transactions.