Thailand
Thailand: VAT exemption repeal in view
The Revenue Department says the draft bill on revocation of the value-added tax (VAT) exemption for online purchases of goods worth less than 1,500 baht from vendors outside of Thailand that are shipped by mail will be ready soon.
The draft bill is being considered by the Revenue Department and will establish a system to facilitate VAT payment as more than 100,000 parcels a day are sent by mail, said director-general Ekniti Nitithanprapas.
The VAT collection is aimed at levelling the playing field for local players, he said.
The draft bill is one among three laws that will authorise the Revenue Department to impose taxes on electronic business operators with a presence outside of Thailand but earning income here.
Such laws are expected to pave the way for the tax-collecting agencies to tap into booming online platforms.
The cabinet recently approved a draft bill on imposing withholding tax on local online vendors and an amended Revenue Code related to VAT collection on e-business operators with a physical presence outside of Thailand but earning income here.
The draft bill on withholding tax is being considered by the Council of State and will later be forwarded to the National Legislative Assembly.
According to the bill, financial institutions and digital financial service providers will be required to report transactions of their customer accounts that have more than 3,000 money transfer transactions per year or more than 200 such transactions with a total value of at least 2 million baht a year.
The measure in intended to determine if online vendors are understating their withholding tax payments.
Under the amended code, foreign-based digital platform operators providing services, including online games, sticker downloads, online advertisements, digital content and online hotel bookings for Thai consumers are liable for VAT.
These online business operators are required to sign up for VAT payment through the Revenue Department’s online system within 30 days of the law taking effect if their income in Thailand exceeds 1.8 million baht a year.
Mr Ekniti said that the laws are aimed at complying with the changing business landscape and that tax collection would be affected if the Revenue Department failed to keep up.
Source: https://www.bangkokpost.com/business/news/1513054/vat-exemption-repeal-in-view