The Revenue Department expects around 100 foreign e-service providers to register to pay value-added tax (VAT) in Thailand during the initial stage of the e-service tax law enforcement on Sept 1, says director-general Ekniti Nitithanprapas.
At the moment 69 foreign e-service operators have registered to pay VAT, of which 20 are giant online platform operators well-known among Thai consumers, said Mr Ekniti.
Before the Covid-19 outbreak began, the department predicted the e-service tax law would generate revenue of at least 5 billion baht in fiscal 2022.
He said the law should foster a level playing field for Thai operators and foreign e-service companies operating in Thailand as both are legally required to pay VAT.
The e-service law stipulates foreign electronic service providers and electronic platforms that earn income of more than 1.8 million baht per year from providing e-services to non-VAT registered customers in the country are obliged to register for VAT, file VAT returns and pay VAT by calculating output tax.
According to the Finance Ministry, e-services subject to this law include e-commerce platforms, online advertising, online accommodation booking, online music and film streaming, online games as well as applications.
Enforcement of the e-service tax law in Thailand follows in the footsteps of more than 60 countries collecting VAT from foreign e-service operators that generate income in their territories.
These countries, including Australia, New Zealand, Japan, Taiwan and South Korea, comply with guidelines introduced by the Organisation for Economic Co-operation and Development to enhance VAT collection for cross-border services. The Thai Revenue Code Amendment Act that facilitates the collection of VAT from foreign e-service providers was published in the Royal Gazette on Feb 10.
