VAT payment of e-service tax beats estimates

VAT payment of e-service tax beats estimates

The number of foreign online platform operators registering to pay value-added tax (VAT) in Thailand has increased to around 120 following enforcement of the e-service tax law last year, says Ekniti Nitithanprapas, director-general of the Revenue Department.

As of Sept 1, 2021, foreign electronic service providers and electronic platforms providing online services in Thailand were required to register for the 7% VAT liability if their annual income exceeded 1.8 million baht.

Mr Ekniti said providers have paid more than 2 billion baht of VAT, of which 686 million baht was paid in September 2021, 646 million baht in October and 590 million baht in November. The department is calculating the payment figure for December.

Given the high number of foreign online platform providers registering for VAT in Thailand, Mr Ekniti said such payments were expected to total around 10 billion baht this year.

Earlier the department expected only 100 providers to register for VAT in 2021, with total VAT payments of around 5 billion baht per year.

According to the Finance Ministry, e-services subject to this legislation include e-commerce platforms, online advertising, online accommodation booking, online music and film streaming, online games and apps.

The law is aimed at fostering a level playing field between Thai operators and foreign e-service companies providing services in Thailand, as the latter are now obliged to pay VAT in line with the law.

Thailand's enforcement of the e-service tax law follows in the footsteps of more than 60 countries around the globe collecting VAT from foreign e-service operators deriving income from their territories.

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