The new VAT rules were posted in the Royal Gazette and will be effective in September. The General Director of the Revenue department of Thailand Ekniti Nitithanprapas confirmed that most foreign online businesses offering electronic services are cooperating with the new law and they plan to register for VAT in Thailand.
As electronic services, the definition considers services, including intangible assets, that are automatically transmitted via the internet or other electronic network, and which could not be rendered without such technology. Services that are offered as a download such as games, movies, brokerage services etc.
As an electronic platform, the definition considers any channel used by numerous operators to provide electronic services to their service recipients.
Thailand is following the trend of digital services taxation as we have seen many countries recently do. Having moved into this new era of cross-border offering of mass streaming services such as video and music, countries one by one find this option of digital service taxation more appealing and a way to increase their revenue from taxes while supporting their local providers of such services.
These last year the pandemic boosted the revenue of these online services offered and customers shifted to online platforms. As a result the Thailand Tax Department expects tax revenue collection from the upcoming e-services tax to amount to more than 5 billion baht per year!