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Online shopping 'E-business tax' to be levied in 2018

BANGKOK: An e-business tax, a levy on any online transaction that takes place in Thailand regardless of the e-commerce operator’s location, is expected to come into force next year, says the Revenue Department’s chief.

economics, technology,


Bangkok Post

Friday 1 December 2017, 11:08AM


The chief of the Revenue Department says he is targeting every sale and purchase on the internet for a tax of up to 15% by next year. Photo: Pawat Laopaisarntaksin / Bangkok Post
The chief of the Revenue Department says he is targeting every sale and purchase on the internet for a tax of up to 15% by next year. Photo: Pawat Laopaisarntaksin / Bangkok Post

A draft bill on the e-business tax sets a ceiling rate of 15%, but the actual rate will vary depending on the nature of the business, said Prasong Poontaneat, director-general of the department.

The bill will levy a withholding tax on all online transactions occurring in Thailand, he said, though the tax will not have to be tacked onto an operator's taxable income calculation.

Given that online purchases are gaining momentum and the Finance Ministry is recording lower tax revenue contributions from traditional sellers, the government is seeking to increase revenue from foreign online vendors who do not sign up to conduct business operations in Thailand.

The department already held its first public hearing on the tax law, covering overseas operators who earn revenue from digital service transactions in Thailand, such as digital marketing, advertising, music and software application downloads.

The department recently said the draft bill will require financial institutions, which now act as intermediaries for money transfers, to withhold tax for online purchases and advertising fees on social media networks, sending the tax to the Revenue Department.

The department hopes that the e-commerce tax will create a level playing field in the online world, as several online firms based abroad earn revenue from Thailand and are not subject to tax. Mr Prasong earlier estimated the value of online purchases in the trillions of baht, while online advertising is valued at B10 billion.

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Mr Prasong said the draft bill will supersede the double-tax agreement, which stipulates that those who are liable for tax payments in any country must have a permanent presence in those locations.

The draft bill on e-business tax will also annul the Revenue Department’s value-added tax (VAT) exemption for online shopping on goods worth less than B1,500 that were purchased from foreign vendors outside of Thailand. The move is intended to pave the way for the department to tax all online purchase transactions.

At present, purchases from foreign e-commerce vendors outside of Thailand are subject to a 7% VAT only if the value exceeds B1,500.

Shopping online for products worth up to B1,500 from overseas sellers without an office in Thailand has become ubiquitous, with the revocation of the VAT exemption intended to create a fair playing field for local vendors who must charge VAT on all purchases, regardless of value.

 

Read original story here.

 

 

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Christy Sweet | 02 December 2017 - 08:47:47

 No way to enforce this absurdity, unless they are going to start keeping records of our clicks and then huge privacy issues will come into play. As usual, there's just no considering of future consequence of action in this proposal. 

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Kurt | 01 December 2017 - 14:28:29

Indeed, other countries understand more than Thailand the international E-business and buying/sales.
Thailand is not yet ready to understand this world wide happening.
The 'zero dollar tour' affair is a good example. Thai don't make money out of it (legal or illegal), so want to block it.
Same as people in Europe book/pay a complete Thailand holiday over there. That is a 'zero Euro tour'.
Why no complains about that?

Living in Thailand, I can make a fine internet booking payment for a great  China holiday ( flights, hotels, a boat cruise).
And I not have the slightest idea where my payments go to.
I guess that may be a perfect 'thai zero baht tour'?  Yes?

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CaptainJack69 | 01 December 2017 - 12:26:53

Such a complex issue. 400 Character limit?

When ordering from abroad we already have to pay excise-tax at customs. Now another 15%?

How to apply it? Use a VPN and 'pay' from outside Thailand, no tax? Or it applies to Thai credit cards? then it applies even when ur not in Thailand?

What about cash-on-delivery?

This is an issue for every country but this 15% will cripple Thailand's e-economy. Other countries are coming up with ways to attract companies not punish consumers.

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