The Ministry of Finance is preparing to bring online sales platforms into the Thai tax system after the cabinet resolved that the platforms must register for value-added tax (VAT).
The move is in line with a cabinet resolution to have the Revenue Department amend the Revenue Code, according to a ministry source who requested anonymity. Online sales platforms will be required to register for VAT in Thailand and may also be subject to personal and corporate income tax.
Requiring online platforms to register for VAT will enable the Revenue Department to access their transaction data, the source said.
The cabinet recently decided to revoke the VAT exemption for imported goods valued at less than 1,500 baht, starting from July 5. The goal was to create tax equity between imported goods, especially from China, and domestically produced goods, particularly by small and medium-sized enterprises.
In 2021, the Revenue Department began collecting VAT for electronic services (VES) from foreign online platforms providing services in Thailand, with the aim of ensuring fair VAT collection for all businesses.
Foreign online platforms include online advertising services; e-commerce services; subscription platforms that stream movies, music and games; intermediaries such as peer-to-peer transport services; and online travel agency platforms for booking accommodation, hotels and travel tickets that serve individual customers (who are not registered for VAT).
The e-service tax law came into effect on Sept 1, 2021, requiring foreign online providers offering service to users not registered for VAT in Thailand, and earning more than 1.8 million baht in service revenue per year, to register for the VES system on the Revenue Department’s website.
The e-service tax aims to create fair competition between Thai and foreign service platforms. Previously, Thai online businesses with annual revenues exceeding 1.8 million baht were required to register and pay VAT, while foreign businesses providing similar services did not have to register or pay VAT.
On Tuesday, the cabinet also ordered expedited measures to prevent and suppress illegal sales of foreign goods. THis will include enforcing collection of customs duty, corporate income tax, VAT, anti-dumping tax and anti-circumvention tax, along with safeguard measures to protect against an increase in imports.
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