Progress made on bid to get e-commerce into tax loop
THE Revenue Department aims to send back to the Cabinet by early next year an amendment to the revenue code that enables the taxing of e-commerce income and transactions.
The draft of the amended law had been put to a public hearing, with the revisions arising from the feedback gained at the hearing to be added. The amendment to the revenue code requires Cabinet approval. The draft, with the revisions from the hearing, will again be put to the public before returning to the Cabinet.
Patricia Mongkhonvanit, deputy director-general of the Revenue Department, said the department aimed to set up a level playing field for local and international digital platform providers. A key plank in this effort is a new Revenue Code Act in supporting the advent of e-business tax collection.
“The strongest criticisms coming out of the feedback concerned the revocation of the Revenue Code’s VAT exemption for imports of product priced at not over Bt1,500. We are now working on all concerns voiced in the feedback and hopefully we will be able complete it and get it to a public hearing again early next year,” said Patricia.
She said the move to enact law on the amendment of the Revenue Code for the collection of taxes is in line with the OECD International VAT/GST Guidelines, which recommend rules for the collection of VAT on cross-border services, including Internet downloads, to private consumers.
She said the Revenue Department wanted to ensure fairness for everyone, given that international digital service platforms now do not pay VAT to the countries where their digital services are available and from which they earn revenue.
Patricia said it was fair that overseas-based companies that provide digital services, such as downloaded products, should pay taxes in the countries where their consumers are.
Pawoot Pongvitayapanu, president of Thai E-Commerce Association, said money would continue to pour of the country if the amended law were not passed.
Patricia described the collection of tax from e-commerce business as not amounting to a new tax; rather, it was merely VAT being applied – as was the case with any business.
“We encourage e-commerce companies, especially individual e-commerce operators, to get into the tax system. This would benefit them as them as they grow their businesses or even expand their operations abroad,” she said.
