Guidelines on VAT imposed on e-services

Under the Act Amending the Revenue Code (No. 53), non-resident electronic service providers and electronic platforms which receive income of more than THB 1.8 million a year from providing electronic services to customers that are not VAT registrants in Thailand and that use the services in Thailand must register for VAT, file VAT returns, and pay VAT by calculating output VAT without deducting input VAT or issuing a tax invoice, starting from 1 September 2021.

Keywords: Mazars, Thailand, Tax, VAT, e-services, Revenue department

10 August 2021

In July 2021, the Revenue Department published “A Guide on VAT on Electronic Service Provided to Non-VAT Registrants in Thailand by Non-resident Business Person (First Edition)” (“the Guidelines”) on its website to provide guidance on complying with the Act Amending the Revenue Code (No. 53).

A summary of the Guidelines is set out below:

Criteria for VAT registration

Non-resident electronic service providers and non-resident electronic platforms must register for VAT in Thailand when the following criteria are met:

Non-resident electronic service providers

Non-resident electronic platforms

1. Providing electronic services from abroad.

1. An ongoing process consisting of offering services, receiving for of services, and delivering services on behalf of non-resident electronic service providers.

2. The services are used in Thailand by a customer that is not registered for VAT in Thailand.

3. Income from the services is more than THB 1.8 million in a calendar year (for a sole proprietor / ordinary partnership) or an accounting period (for a company / limited partnership).

E-services which are subject to VAT

The Guidelines provide examples of services which fall under the definition of e-services subject to VAT and which are not classified as e-services. 

Under the Guidelines, sales of newspapers, magazines, and textbooks in electronic form (e-books) are exempt from VAT. Therefore, non-resident service providers of e-books and non-resident e-book platforms are not required to register for VAT, file VAT returns, or pay VAT in Thailand. In addition, the VAT on e-services shall not be applicable to sales of goods through an online channel and goods imported into Thailand through customs, since imported physical goods have to go through Thai customs and the Customs Department collects VAT for the Revenue Department.

VAT registration

Non-resident electronic service providers and electronic platforms which provide electronic services to non-VAT registrants in Thailand must apply for VAT registration within 30 days of the day that income from such services exceeds THB 1.8 million. It will be possible to register for VAT with the Revenue Department by 1 September 2021.

The VAT registration form and supporting documents must be submitted to the Revenue Department by uploading them to the Simplified VAT System for e-Services (SVE) on the Revenue Department’s website.

Documents to be submitted together with the VAT registration form are as follows:

1. For a legal entity

  • Certificate of incorporation, officially translated into English and containing entity’s name, date of incorporation, and country of incorporation. The document must be notarized by the Ministry of Foreign Affairs, a notary public, or other agencies authorized to notarize documents based on the law of the country in which the business is incorporated.
  • Certificate of tax residency in the country of incorporation (optional)

2. For an individual

  • A copy of the individual’s passport (only the photo page showing the passport holder’s name, photo, and passport number) or a copy of the individual’s valid national ID card
  • Certificate of tax residency in the country where the individual is a tax resident (optional)

When VAT registration is complete, the VAT registrant will be notified of this through the SVE, and the list of VAT registrants on the SVE will be announced on the Revenue Department’s website.

VAT filing and payment

VAT registrants must file VAT returns (Form P.P.30.9) and pay VAT monthly through the SVE. These VAT returns must be filed by the 23rd of the following tax month. The VAT return must be filed every month, even if electronic service providers and electronic platforms have no income from conducting business in that tax month.

The VAT can be paid in Thai baht through the SVE one of the following ways:

  • By wire transfer to the Revenue Department’s bank account; or
  • By credit card.

The Revenue Department will issue a receipt only after it receives the tax payment.

Output VAT report

The VAT registrant is responsible for preparing an output VAT report in accordance with the form prescribed by the Revenue Department. The VAT registrant must keep the output VAT report, including the documents used to produce the report, for at least 5 years from the date the report was made. VAT registrants are not required to submit an output VAT report to the Revenue Department unless requested to do so.

Compliance services

The Revenue Department’s Large Business Tax Administration Division is responsible for supervising and auditing non-resident electronic service providers and electronic platforms which are VAT registrants in Thailand.  Correspondence regarding supervision or audit between the Division and the service providers and electronic platforms will be conducted electronically through the SVE or email. If non-resident VAT registrants fail to comply with the law, the VAT registrants will be subject to the same civil and criminal penalties as VAT registrants located in Thailand.

Our tax experts are available to assist you with VAT registration and VAT filing requirements.

Source:  the Revenue Department