How to Navigate Thailand's New Tax Requirements on Sales of Digital Products and Services -
The country recently published guidelines that require providers of electronic services -- select digital products and services -- to be VAT registered if they satisfy certain requirements and requirements.
In the following section, we'll take through all you need to know about Thailand's new taxation requirements on the sale of digital goods as well as services.
- Foreign e-services provider requirements
- What is Thailand's rates of VAT for E-Services?
- Do I have to be registered for VAT within Thailand?
- How to register for VAT in Thailand
- List of possible VAT penalties that could be imposed
A new set of requirements for foreign companies of e-services
On September 1, 2021 Thailand expanded its VAT law to include the sale of digital products and services (e-services) that are provided by non-resident businesses to Thai customers. Previously, this type of business was not required to register for VAT.
In order to monitor compliance with the new tax regime To monitor compliance with this new regime, the Thai Revenue Department is maintaining a open list of businesses that are non-residents which have registered to VAT.
Thailand recently published a guide which provides details on many compliance-related issues like the filing of VAT and its payment, the validation of VAT numbers and utilizing Foreign Exchange (FX) and other sources.
There are a few words in the manual that are worthy of definition:
- Electronic services:Includes non-physical products delivered via the internet or other electronic network in an automated way that's impossible to ensure without IT (i.e. online games, web-based and mobile applications, software).
- Digital Platforms: Any market, method, or any other process that digital service providers use for delivering services to customers. These platforms are facilitators for service suppliers and service customers and help facilitate transactions between them.
- Simple VAT System E-Service (SVE):The electronic system Thai's Revenue Department offers service providers as well as electronic platforms for registering as VAT payers, file VAT tax returns, pay VAT and request for VAT refund electronically.
Find out more information about Thailand's VAT on Electronic Services in the Official Guide.
What are Thailand's VAT rates for E-Services?
| Rate | Type | Liste of Goods and Services |
|---|---|---|
| 7% | Standard | Music, online games videos, video games, digital ads, software, mobile applications Pre-recorded online classes and commissions to intermediary companies, digital images, financial data, web hosting Search engines, on-demand streaming listings, electronic marketplaces |
| 0% | Exempt | Ebooks, live teaching services payments facilitation, money transfer service, telecommunications, professional services with human intervention, electronic vouchers |
For calculating your VAT value, multiply the service value in Thai Baht by 7 percent VAT rate.
Learn more on Thailand's VAT rate for Electronic Service (VES) via the official Thailand Revenue Department website.
Do I have to register for VAT registration in Thailand?
If you provide electronic services to a non-VAT or VAT registered individual, like consumers or small, unregistered firm, you'll have to sign up with VAT if your taxable service exceeds 1.8 million Thai Baht (approximately $55,800 USD) within a calendar year.
Businesses that are not resident in Thailand should sign up to pay VAT in Thailand when they meet the following requirements:
- Provide e-services, receive payments as well as provide services via an electronic platform from abroad.
- The online service is used in Thailand by customers who are not VAT registered.
- Revenue from e-services exceeds 1.8 million baht during the accounting timeframe.
Refer to the Key Elements section of the guide for further details.
How do I register with VAT in Thailand
sellers don't need to worry about registering for VAT or the process of calculating, collecting or filing tax returns in Thailand as we manage it on their behalf.
If you're not using for tax management, we suggest you review the guidance that Thailand's Revenue Department. Here's some information to point you to the correct direction:
- Electronic and other e-services providers from abroad as well as platforms can register for VAT online through the SVE available on the Revenue Department's site.
- The VAT registration form should be filed separately by each business. If you have multiple branches or subsidiaries, each company that meets the requirements to register VAT must do so separately by using SVE.
To learn more about VAT registration, check out the complete VAT registration guide. Electronic Services (VES) Registration Guide.
Possible VAT penalty list
Here's a list of possible consequences your company might be subject to if it fails to comply with the VAT rules in Thailand.
Civil Penalties
| Offenses | Fines/ Penalties |
|---|---|
| Conducting business without VAT registration | A penalty of twice the amount due during tax month, during the time of inability to comply with such provision, or 1,000 Baht per month, whichever is more. |
| The late filing of VAT returns | A fine twice the tax to be paid in a tax month |
| Tax returns that are not correctly filed can affect the amount of tax to be paid | The amount of tax to be assessed is the fine of tax |
Criminal Penalties
| Offenses | Penalties/ Fines |
|---|---|
| Failure to register for VAT and conducting business without VAT registration | A term of imprisonment not longer than one month, or a fine not more than 5 000 Baht or both |
| Non-filing of VAT tax returns | A penalty of not over 2 000 Baht |
| Failing report VAT as prescribed by the Director-General | A term of imprisonment not greater than 6 months or a fine not greater than 10,000 Baht or both. |
| The intention to avoid or attempt to evade VAT, issuing tax bill or debit note without authorization | A sentence between 3 months and 7 years and a fine between up to 2,000 Baht up to 200000 Baht |
Take on tax liability
Our tax experts work around all hours to keep updated on changes in tax legislation and work with outside specialists to ensure that your company is secure and in compliance.
- Offloads your tax liabilities
- Tax calculation is automated at the time of checkout.
- Pays taxes globally on your behalf
- Manages the complete tax compliance procedure
- Helps with tax-exempted orders