Thailand: Proposals concerning VAT, foreign e-commerce | KPMG | GLOBAL

Thailand: Proposals concerning VAT and foreign e-commerce transactions

Thailand: Proposals concerning VAT, foreign e-commerce

The Thai Revenue Department issued its comments addressing certain concerns and questions raised by the public stakeholders on the proposed tax legislative amendments that would affect the tax treatment of goods and services provided through foreign e-commerce into the Thai market.

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Proposed tax measures

  • For the purposes of the proposed e-commerce law, a foreign company that operates a business using electronic media in Thailand would be a foreign company that operates through a domain name that includes “.th” or uses Thai alphabet (e.g. ภาษาไทย.com) or receives payments in Thai Baht from Thailand.
  • Having a deemed permanent establishment (PE) in Thailand would not necessarily mean that the foreign company is obliged to register for value added tax (VAT) purposes.
  • The proposed e-commerce law would establish that a foreign company that operates its business using electronic media would be subject to withholding tax at a rate of 15% on income derived in Thailand from online advertising or from providing space on a webpage.
  • Under the draft law, a foreign company selling intangible goods or rendering services through electronic media to a non-VAT registered person in Thailand would be required to register for VAT in Thailand and would be subject to VAT on its Thai sales.
  • VAT registration would not automatically create a taxable presence / PE in Thailand for income tax purposes.
  • The VAT registration process for a foreign operator that is required to register under the proposed e-commerce law would be amended to simplify the rules, and additional guidance would provide how to determine the place of supply for VAT purposes.

 

Read a November 2017 report prepared by the KPMG member firm in Thailand

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