Tatiana Bespalova from KPMG Thailand discusses the impacts that the draft legislation will have on foreign e-commerce companies.
The Thai Revenue Department (TRD) is considering ways to improve and increase revenue collection from businesses operating in e-commerce. In the past few years, the TRD has launched several attempts to include e-commerce business operators into the Thai tax system. In the context of international e-commerce transactions, the current Thai tax regulations do not provide the TRD with an adequate basis to impose Thai taxes since the foreign operators may not have a presence in Thailand under domestic rules.
Draft legislation is now under public consultation, following which, the draft will be passed to the National Legislative Assembly for enactment. All public stakeholders are encouraged to submit their comments on the draft legislation, which is open until 11 July 2017. This is a significant development in the Thai legislative process, which until May 2017, did not include a public consultation process.
The draft legislation raises several unanswered questions, some of which will hopefully be addressed in subsequently issued regulations.
The key provisions in the draft legislation are:
The draft legislation will impact many foreign e-commerce players in the Thai market either through Thai corporate income tax, withholding tax or VAT.
KPMG Thailand is preparing a submission as part of the consultation process.