Thailand: VAT requirements for foreign providers of electronic services
Thailand: VAT requirements for foreign providers
Legislation enacted 9 February 2021 concerns the collection of value added tax (VAT) from foreign providers of electronic services (e-services) when the e-services are provided to non-VAT registrants in Thailand.
The measures are effective for VAT payments and remittance received or payments made from 1 September 2021—so that tax return filing obligations will begin for the month of September 2021 onwards with the first deadline falling on the 25 October 2021.
The e-services measures provide:
- A foreign company that provides e-services to a non-VAT registered person (typically includes individual consumers but also certain small unregistered businesses) will be required to register for VAT in Thailand, if the revenue threshold When a foreign company provides e-services, receives payments for and delivers the e-services through an electronic platform, the electronic platform owner has an obligation to register for and pay VAT on behalf of all foreign companies that use its platform. The platform owner is required to register for VAT once and pay the combined output VAT for all relevant foreign companies.
- The registered foreign company or platform must remit output VAT to the Thai Revenue Department. No input VAT offset is allowed.
- There is no requirement to issue a tax invoice.
- VAT returns must be filed, and tax payments made on a monthly basis. The deadline for filing and payment is the 23rd day of the following month.
Some of key definitions are:
- Intangible property transferred via an electronic network is excluded from the definition of “goods.”
- “Electronic service” means a service, including intangible property, delivered through internet network or any other electronic network with substantially automatic nature, and such service cannot be provided without information technology.
- “Electronic platform” includes markets, channels or any other methods that several service providers use to provide e-services to service recipients. When a Thai VAT registrant pays a service fee to a foreign company providing e-services, the VAT registrant is required to self-assess VAT on such service fees and remit VAT to the Thai Revenue Department. In these circumstances, the foreign company is not required to register for VAT in Thailand.
Examples of e-services that are subject to the new rules include online downloading of games, music or movies; stickers sold in chat applications; streaming services; and advertising services on web space or applications.
VAT registration and tax return filings and payments will be administered via a “Simplified VAT System for e-Service” that is currently being developed by the Thai Revenue Department.
Read a February 2021 report prepared by the KPMG member firm in Thailand
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