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Thailand

Thailand

Explore the requirements and rules that apply to electronically supplied services in Thailand.

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Supplies of e-services to consumers (B2C)

Is a non-resident supplier of e-services to consumers located in this country obliged to register and/or account for local VAT/GST on such supplies in this country?

No, reverse charge applies. However, practically, there is no mechanism to force individuals to collect and report VAT. 

If there is no current requirement, is there any anticipated change to that position?

The timing of when the new law will become effective is unknown at this stage.

It is not clear whether the draft legislation on e-commerce, especially for VAT implications, will apply to B2C transactions only.

Is an invoice compliant with the VAT/GST law in the customer's country required?

Yes, however, it is unclear whether this requirement will be amended or simplified under the new law.

Supplies of e-services to businesses (B2B)

Is a non-resident supplier of e-services to business customers located in this country obliged to register and/or account for local VAT/GST on such supplies in this country?

No, reverse charge applies. Currently, Thailand does not require a digital service provider who is residing outside of Thailand and has no permanent establishment in Thailand to register for VAT. Thus the reverse charge applies.

If there is no current requirement, is there any anticipated change to that position?

There is a draft legislative proposal to introduce such a requirement.

Under the draft legislation, a foreign company that sells intangible goods or renders services through electronic media to a non-VAT registered person in Thailand will be required to register for VAT and will be subject to VAT on the Thai sales it concludes. It is unclear whether this will be limited to B2C or will extend to B2B, and if so, what the consequential changes will be in relation to the currently applicable reverse charge mechanism.

If there is not a requirement for the non-resident supplier to register for VAT/GST, are the services subject to VAT/GST withholding by the customer?

No, the customer pays the full price to the supplier, and self-assesses for VAT on this price in its VAT return.

Where there is a current or future requirement for non-resident suppliers to register and/or account for local VAT/GST or a customer VAT withholding requirement:

When did/will that requirement come into effect?

No requirement exists currently. The timing of when the new law will become effective is unknown at this stage.

What is the applicable annual turnover threshold (in local currency) for that requirement to apply?

1,800,000 Thai baht (THB) - Within 30 days after VAT revenue reaches this level. The same threshold is proposed under the draft legislation.

Is simplified or standard registration required?

It is unclear whether the standard registration requirements will be amended or simplified under the new law. Current VAT registration requirements lead to creation of an income tax permanent establishment and various legal issues.

Does the requirement apply to all e-services?

No, under the existing legislation.

Yes, under the draft legislation.

Contact

Tatiana Bespalova
Partner
T +66 2 677 2697
E tbespalova1@kpmg.co.th

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