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Thailand: VAT proposed regulations include e-commerce measures

Thailand: VAT proposed regulations

The Thai Revenue Department issued a third draft of proposed value added tax (VAT) regulations.

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The regulations, as proposed, would affect foreign e-commerce operators and electronic platforms available to the Thai market. For instance, there are the following provisions in the current draft of the proposed regulations.

  • Clarification of the terms “goods,” “electronic services,” and “electronic platforms”
    • Any intangible assets transferred via internet network or any other electronic network would be excluded from the definition of “goods.”
    • “Electronic service” would be a service delivered through internet network or any other electronic network with substantially automated nature. Such service could not be provided without information technology.
    • “Electronic platform” would be markets, channels or any other method that several service providers use to provide electronic services to service recipients.
  • Amendment to the self-assessed VAT regime
    • A Thai VAT registered person that pays a service fee to a foreign company providing electronic services would be required to self-assess VAT on such services and to remit VAT
    • The foreign company would not be required to register for VAT in Thailand.
  • Introduction of an electronic VAT registration system
    • A foreign company that registered for Thai VAT for purposes of providing electronic services outside of Thailand that are used in Thailand by a non-VAT registered person would be prohibited from issuing Thai tax invoices. This means that the foreign company would not be able to pass the VAT cost as a tax to consumers. 

The effective date of these measures generally would be after their publication in the Royal Gazette. 

KPMG observation

At present, it is not certain if or when the proposed VAT regulatory amendments would be finalized.

What do foreign companies providing electronic services to non-VAT registered recipients in Thailand need to consider?

  • A foreign company that provides electronic services to a non-VAT registered person would be required to register for VAT in Thailand (assuming the THB 1.8 million threshold is met). The registered foreign company would have to remit output VAT, but no input VAT offset would be allowed. The foreign company also would be required to submit VAT return. 
  • When a foreign company provides services electronically, receives the payment of service fees, and delivers the services through an electronic platform, the electronic platform owner would be required to register for and pay VAT on behalf of all foreign companies that use its platform. The proposed regulations would clarify that the platform owner would only have to register for VAT once and could pay the combined output VAT for all subject foreign companies.


Read a January 2020 report prepared by the KPMG member firm in Thailand

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