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Published in the Government Gazette on February 10, 2021 and effective September 1, 2021, foreign businesses rendering e-services to users in Thailand who are not VAT registrants will be required to register to VAT if their turnover in Thailand exceeds THB 1.8 million per fiscal year. Such revenue generated from Thailand-based users will be subject to 7% VAT. This includes online games, sticker downloads, online ads, digital content and online hotel bookings.
Overseas e-services providers shall file their Sales VAT returns to the Revenue Department on a monthly basis but shall not be permitted to claim Input VAT (for their expenses subject to VAT in Thailand, if any).
This amendment of the Revenue Code also adds the two following definitions for “electronic service” and “electronic platform”:
- “electronic service” is “a service which includes intangible assets delivered through internet systems or other electronic means, in which the nature of the service is automatic, and in which the service cannot be performed without information technology.”
- “electronic platform” is “a market, channel or any other process that multiple service providers use to provide electronic services.”
When online services are rendered via e-platforms, the operator of such platform is responsible for filing Sales VAT returns on behalf of all services providers.
Further clarifications and guidance, especially on practical aspects, are expected to be announced by the Revenue Department in the coming months until the enforcement of the law.
Should you need further information about taxation in Thailand, please contact us at contact@orbis-alliance.com. We will get back to you very shortly.