On 10 February 2021, the Royal Thai Government Gazette announced the Act Amending Revenue Code No.53 (the “Act”). This Act stipulates that overseas electronic service providers and online platforms must now register for and pay VAT on electronic services, delivered over the internet or other electronic networks (“Electronic Services”) supplied to non-VAT registered consumers in Thailand. This VAT applies to such transactions from 1 September 2021 onward.
 
The Electronic Services must be: 

• Supplied by overseas service providers; or
• Supplied through ‘electronic platforms’ defined as online markets or channels through which service providers supply the Electronic Services from overseas.

Overseas service providers and electronic platforms must now register for VAT if their annual revenue reaches THB 1.8 million for the respective tax year. If the Electronic Services are provided through an electronic platform, the platform operator must remit VAT on behalf of all Electronic Services providers conducting their activities through its platform but is not required to disclose the transactions of each Electronic Services provider. Importantly, service providers or platform operators are not allowed to offset any input VAT against output VAT generated from the supply of Electronic Services to non-VAT registrants in Thailand when remitting VAT to the Thai Revenue Department (“IRD”). These VAT registration and payment requirements apply irrespective of whether the overseas service providers or electronic platforms have a local commercial presence, subsidiary, branch office or taxable presence (permanent establishment) through which they would normally be subject to domestic Thai taxation.

Contacts

Jack Sheehan Partner Head of Regional Tax Practice [email protected]

Jonathan Blaine Thailand Tax Director [email protected]

Chanattorn Thunyaluck Senior Legal & Tax Adviser [email protected]

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