Thursday, October 22, 2020

New VAT law expected to bring Bt3 bn from foreign e-commerce platforms

Jun 11. 2020
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The Revenue Department expects global e-commerce and digital platforms to agree to abide by Thailand’s new tax bill when it becomes law.

The department estimated that Thailand would earn over Bt3 billion from the value-added tax collected from international digital platforms, such as Facebook, Uber or Netflix.

Department director-general Ekniti Nitithanprapas added that the revenue from those platforms would be more during the Covid-19 crisis, as more people consumed more products and services from those platforms.

A Cabinet meeting on Tuesday (June 9) gave the green light to amend the Revenue Code to collect a value-added ‘E-Service’ tax from foreign digital platforms that do not have a subsidiary company in Thailand. The next procedure is to propose the draft bill to the House of Representatives for its consideration.

Ekniti explained that the law could allow his department to collect tax from all foreign services of those platforms, such as movie watching, video games downloading, or taxi booking. Moreover, the law will allow the Revenue Department to collect VAT from those businesses earning revenue from advertising on each platform.

The law will, mainly, order those foreign entrepreneurs providing the services in Thailand to register and disburse the VAT similar to Thai businesses. The foreign businesses in this case, he added, must earn over Bt1.8 billion a year.

“To advertise some product or service, Thai platforms must pay the VAT, but foreign platforms did not have to. This is inequality,” he said.

Ekniti explained that his department would authorise foreign corporations to pay the VAT through the electronic system. “The entrepreneurs are ready to pay the VAT legally, and around 60 countries have enforced this kind of law, for instance, Indonesia,” he added.

“If the foreign corporations do not register in the system after the law comes into effect in Thailand, the Revenue Department cannot use other laws to force them to close their website or service, but it can use international mechanisms or international collaborations to deal with the platforms” the director-general said.

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