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Thailand: E-business tax bill on the cards for next year
A draft bill on e-business tax, a levy on foreign-based online platform operators earning income in Thailand, is expected to be enforced next year, says the Revenue Department’s head.
The bill is being deliberated by the Council of State and will be forwarded to the cabinet and the parliament houses for approval later, said director-general Ekniti Nitithanprapas.
Prime Minister Prayut Chan-o-cha wants an e-business law to create tax payment fairness for local operators, Mr Ekniti said.
Without the law, online platforms outside of Thailand are not liable for value-added tax (VAT), as they are not permanently established in the country.
Under the bill, overseas digital platform operators providing services (including online games, sticker downloads, online ads, digital content and online hotel bookings) that generate annual sales of more than 1.8 million baht from Thais are required to register for VAT payment and are subject to sales tax.
The country’s largest tax-collecting agency estimates that the e-business tax will generate 4 billion baht for state coffers in the first year after taking effect.
Mr Ekniti said 60 countries have similar laws regarding collecting tax. Online operators, particularly large players, are willing to pay, he said.
Some nations have imposed harsh measures on foreign online platform operators that are tax dodgers, including shutting down websites, according to Mr Ekniti.
The Council of State wants a discussion with the Revenue Department about penalty measures for tax dodgers, he said.
The department also needs to push a draft bill on international data exchange, which enables the tax-collecting agency to exchange data with other countries’ authorities in the event that some overseas online platform operators fail to pay the tax, in order to complement the draft bill on e-business tax, Mr Ekniti said.
As per the Revenue Code’s Section 10, the department is prohibited from sharing taxpayer data with outsiders.
In a related development, the Revenue Department has set up a unit tasked with monitoring those who are not in the tax system.
According to department estimates, 100,000 local and foreign online operators are outside the tax system.
Regarding taxpayer base expansion, the department expects the number of individual taxpayers to increase to 11 million next year from 10.7 million.
The department targets tax revenue collection of 2.17 trillion baht for fiscal 2020.
Source: https://www.bangkokpost.com/business/1820134/e-business-tax-bill-on-the-cards-for-next-year