Thailand
Thailand: Committee agrees to end online shopping exemption
A tax reform committee has agreed to revoke the value-added tax (VAT) exemption for online purchases of goods worth up to 1,500 baht from vendors outside of Thailand that are shipped by mail, aiming to provide a level playing field with local operators.
“The issue will be forwarded to policymakers and the government,” said Prasong Poontaneat, the finance permanent secretary. “The committee stands ready to amend Revenue and Customs department laws to cancel the VAT exemption, but this depends on the government’s decision.”
If the government supports the proposal, the VAT exemption will be scrapped for 2020, he said.
The Thai Chamber of Commerce has called on the government to waive the VAT exemption for goods worth 1,500 baht or less purchased outside of Thailand and shipped through the mail, saying the exemption puts local players at a disadvantage.
Consumers are subject to a 7% VAT payment for every purchase of goods and services from vendors registered in the Thai tax system.
Overseas online vendors have taken advantage of the VAT exemption for products valued at 1,500 baht or less and shipped by mail, and Thailand should impose VAT as other countries do, Mr Prasong said.
Chaiyut Khamkhun, an adviser and spokesman for the Customs Department, said lost items sent back from other countries to owners are not liable for VAT, but owners must have evidence that the items were bought from Thailand.
The item’s condition is another indicator that customs officials can use to determine if items shipped from overseas are subject to VAT, he said.
Mr Chaiyut’s comments came after a Facebook post by online celebrity E-Jiab Liabduan, who said a friend of an administrator was charged 7% VAT for a mobile phone charger lost at an overseas hotel and mailed back because the charger was valued at more than 1,500 baht.
Sommai Siriudomset, a spokeswoman for the Revenue Department, said VAT collection on products shipped by mail from abroad will be charged at the time of delivery based on Customs Department rules. This means the phone charger would be exempt from tax if the owner could present evidence it was not bought overseas.
Source: https://www.bangkokpost.com/business/1818594/committee-agrees-to-end-online-shopping-exemption