VAT imposed on e-services

As approved by the Cabinet on 9 June 2020, the Act amending the Revenue Code (No. 53) to impose VAT on foreign-based operators that provide services to customers not registered for VAT in Thailand was published in the Royal Gazette on 10 February 2021.

Keywords: Mazars, Thailand, Tax, VAT, E-services, Royal Gazette, Revenue Department, SVE

22 March 2021

The Act shall come into effect on 11 February 2021. However, the provision with respect to VAT remittance will be enforced for income received or payment made from 1 September 2021. 

Under the Act, an overseas business operator providing electronic services (e-services) to customers who are not VAT registrants in Thailand and who use the services in Thailand are required to register and pay VAT in Thailand if they generate revenue of more than THB 1.8 million a year from providing such services.

Electronic services are defined as a service, including intangible property, delivered through the internet or any other electronic network with a substantially automatic nature and cannot be provided without information technology.

The Revenue Department provides examples of electronic service to include:

  • Services to download or play games, listen to music, or watch movies online
  • Services to download stickers in a chat application
  • Streaming services which transmit multimedia files, both video and audio, over the internet such as live broadcasts of concerts, events, games, and other programs
  • Provision of space for advertising on a website or application

The overseas e-business operators shall calculate their VAT liabilities to be remitted to the Revenue Department on their total amount of revenue earned from e-services provided to customers not registered for VAT in Thailand without setting off any input VAT paid on expenses. In addition, they are not allowed to issue tax invoices to customers.      

If the overseas business operator provides such e-services, receives payments and delivers the services through electronic platforms, the owner of the electronic platform is required to register and pay VAT on behalf of all overseas business operators using its platform in such manner without having to provide separate details for each operator. 

Electronic platform means any market, channel or other process used by several service providers to deliver electronic services to clients such as Apple, Google, Facebook, Youtube, Line, Joox, Netflix, TikTok and others.

The Revenue Department announced that they have prepared the Simplified VAT System for e-Service (SVE) for overseas e-business operators to register for VAT, filing VAT return and remitting VAT liabilities electronically.

Supplementary regulations providing further clarity on the legislation and compliance system may be issued subsequently.