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New tax law in Thailand for cross border e-commerce

Update On :02 March 2017

New tax law in Thailand for cross border e-commerce

A new tax law on cross-border e-commerce transactions in Thailand is going to be imposed in April by it's Revenue Department. The development by the tax collection agency is intended to increase tax collection efficiency, particularly for fast-growing cross-border e-commerce transactions for which merchants are not required to pay value-added tax to the Thai government.

International e-commerce allows consumers to shop online, purchasing products from websites or marketplaces in other countries that hosts multinational merchants. Prasong Poontaneat, director-general of the Revenue Department said that imposing tax on revenues from digital marketing and advertising will be the next target for the department. 

Mr Prasong said the department is working with the Electronic Transactions Development Agency (ETDA) to impose what he termed a specialised tax on e-commerce operators with a presence either in the country or outside the country.

Surangkana Wayuparb, the ETDA executive director said it is working with the department to amend laws to tax cross-border e-commerce transactions, with changes expected soon. Existing laws only permit the department to impose taxes on companies located in Thailand, while foreign e-commerce operators are not taxed for cross-border transactions. 

She said there are around 300,000 local e-commerce operators registered on ETDA's database, but only 2,000 are in the Revenue Department's formal tax system, which gathers a mere 300 million baht from online operators. Thailand's e-commerce market was estimated to be valued at 2.5 trillion baht in 2016, up from 2.2 trillion in 2015.

Mr Prasong said starting today the department will apply e-tax invoicing via email for companies with annual revenue of less than 30 million baht to facilitate small e-commerce merchants in processing VAT issues. A full e-tax invoicing system for large enterprises to reduce costly paper-based tax invoices is planned soon. 

Revenue department plans to spend 2.3 billion baht this year installing IT systems to increase its e-tax services in the digital era, aiming for e-tax to boost VAT by at least 100 billion baht a year by 2022.

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