InTouch: Thailand

Topic

Key issues

Scope

Non-resident electronic service providers and electronic platform operators, who receive income of more than Baht 1.8 million per year from providing electronic services to non-VAT registered customers in Thailand, must register for VAT, file VAT returns and pay VAT by calculating output tax (without deducting input tax).  

These taxpayers are not required to issue tax invoices or prepare input tax reports.

Key elements

The guideline gives more insight into the following:

• The definition of ‘electronic services’: the guideline provides a non-exhaustive list of services which are included (e.g. mobile applications, online advertising) and excluded (e.g. telecommunication services, money transfer services) from the definition. 
  
  Interestingly, distance teaching via pre-recorded media is treated as an electronic service. However, a live teaching course is excluded from the definition of electronic services.

• Location determination: The rules for determining whether a service is ‘used in Thailand’ are clarified. The service should be treated as used in Thailand if the customer information indicates that the customer is in Thailand.  The non-resident service provider should determine the location of the customer based on one of the following items of customer information.
  
  1. Payment information
  2. Residence information
  3. Access information
  
  If the above information is not consistent, the taxpayer should obtain at least two pieces of non-conflicting evidence of where the customer is located or the service is used.

• Determining the VAT registration status of customer: By default, non-resident electronic service providers and electronic platforms can treat the customer as a non-VAT registrant (and must charge VAT). If VAT registration information is provided by the customer, the non-resident service provider is not required to completely verify the customer’s VAT registration. The guideline indicates that the non-resident service provider may request and rely on a Tax ID number provided by the recipient of the service.
  
  The non-resident service provider can also visit the Revenue Department's website to verify the validity of the customer’s VAT registration and tax identification number.
  

• The provision of services through an electronic platform: An electronic platform operator is required to pay VAT on behalf of non-resident service providers who provide e-services through a platform with all of the following processes:
  
  1. Offering services
  2. Receiving payment
  3. Delivering services
  

VAT registration

The guideline provides more details of the VAT registration date and process. If the non-resident service provider or non-resident electronic platform operator has revenue exceeding Baht 1.8 million in an accounting period (for a corporation) or a calendar year (for an individual), it should register for VAT within 30 days from the day on which the revenue exceeds Baht 1.8 million.

For corporations, income should be calculated from the first day of the accounting period that ends after September 1, 2021. For individuals, income should be calculated from January 1, 2021. If the income exceeds Baht 1.8 million before 1 Sep 2021, the VAT registration should be completed by 1 September 2021.

All registration documents must be submitted to the Revenue Department though VES on the Revenue Department’s website.

VAT point, VAT filing and VAT payment

The VAT liability from the provision of electronic services to customers in Thailand will arise when the service fee is paid either fully or partially. If payment is made using a credit card, the VAT liability arises when proof of the credit card usage is issued.

More details are also provided on the exchange rate for converting foreign currency into Thai Baht, VAT filing through the form called “P.P.30.9”, the VAT filing due date (i.e. the 23rd day of the following month) and the VAT payment channels via VES.

Output tax report

The guideline provides a sample of the VAT output tax report and stipulates that the non-resident VAT operator must retain the output tax report for at least five years. This is similar to other VAT operators in Thailand.

VAT refund

The guideline clarifies that VAT operators have the right to request a VAT refund if there is an overpayment of VAT. However, the details of the VAT refund process have not yet been disclosed. 

Compliance and enforcement

The Revenue Department’s Large Tax Administration (LTO) is responsible for supervising and auditing non-resident electronic service providers and electronic platform operators.

If the non-resident VAT electronic service providers fail to comply with the law, they will be subject to the same civil and criminal penalties as VAT operators in Thailand.