What is E-Service tax?
E-Service Tax is the collection of Value Added Tax (VAT) to electronic service providers from abroad (E-Service) and various electronic platforms. If sales exceed 1.8 million baht per year, VAT must be submitted to the Revenue Department. Which is currently charged at a rate of 7% of the service price.
It is an online platform from abroad that provides services in Thailand such as Facebook, Google, Line, Microsoft, Apple, TikTok, etc. If the income exceeds 1.8 million per year. Must go VAT registration and filing VAT with monthly tax payment by the 23rd of the following month. Why do you have to collect e-Service tax?
The main reason is to ensure fairness among Thai entrepreneurs. With entrepreneurs from abroad Because usually when doing business Thai entrepreneurs have to file taxes and pay 7% VAT to the Revenue Department all the time. But foreign entrepreneurs who have income in Thailand do not have to pay VAT at all. Because the old law does not cover it.
Therefore the E-Service law has come out to help close the loophole here. So that foreign entrepreneurs must register and pay the same taxes as Thai entrepreneurs. The Revenue Department expects to be able to collect more VAT at 5,000 million baht per year.
It’s not just Thailand that collects E-Service tax. But more than 60 countries such as Australia, New Zealand, Singapore, Malaysia, Taiwan, etc. Have enacted laws on this matter. To enable foreign electronic platform operators to register and remit VAT to the taxing authorities of that country. When does the e-Service tax in Thailand begin to apply? Thailand has announced The Revenue Code Amendment Act (No. 53) B.E. 2021. Or the e-Service Act in February 2021. Which will be effective from September 1, 2021 onwards.
Which businesses need to register e-Service tax in Thailand?
The business that is directly related is the platform of foreign companies that provide online services in Thailand. Divided into 5 main groups:
1. Platform service business for online sales such as Amazon, Alibaba
2. Business providing advertising space on the website. Or social media such as the Facebook, a Google
3. Business services such as hotels and travel with Agoda, Booking by, an Airbnb
4. services as an intermediary between buyer – seller services, such as car -, Transit
5. business. Service members watching movies-listening to music online, playing games and various applications such as Netflix, Disney, Youtube, IQIYI, Spotify, App Store, Play Store, Zoom, Slack.
By these 5 business groups If earning more than 1.8 million baht per year and have not registered VAT. Must register and process tax through the VAT for Electronic Service (VES) system on the website of the Department.