New e-VAT Legislations for Foreign Source Digital Service and e-Platform
On 10 February 2021, a new Act Amending to the Thai Revenue Code (No.53) B.E. 2564 was legally enacted concerning foreign companies’ duty to collect and remit VAT on digital services and e-platforms as published in the Thai Royal Gazette. This new VAT filing obligation applies to all foreign companies who provide their digital/electronic service and/or e-platform service to Thai individuals. These foreign companies are required to apply for Tax I.D. status as Thai VAT registrants if their annual revenues reach the minimum threshold of more than THB 1.8 million (USD 60,040) in a tax calendar year, which obligates the foreign company to submit VAT returns on a monthly basis.
The definition of e-Service under Clause 77/1 (10/1) of the new law includes provision of services that are delivered to Thai individuals through internet or other electronic methods. where the nature of service in principle is performed automatically and cannot be performed if it lacks information technology.
The definition of e-Platform under Clause 77/1 (10/1) includes market, channel, or other methods that many service providers use to render electronic services to service recipients.
Those foreign companies are required to charge 7% VAT on the gross service fee received from Thai individuals. However, they are not allowed to issue tax invoices or claim input tax that arises from these business operations in Thailand.
Please note that there has not yet been any announcement concerning criteria or method as to how the Thai Revenue Department will enforce this new law to allow the foreign companies to register their Thai VAT I.D. status and how to file and pay VAT in Thailand under this new legislation. We expect that the subordinate regulations will be enacted and published before this e-VAT law will become effective on 1 September 2021.