Electronic Services Tax VAT Payment Exceeds Estimates

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The number of foreign online platform operators registering to pay value-added tax (VAT) in Thailand rose to around 120 after the Electronic Services Tax Act was implemented last year, said Ekniti Nitithanprapas, Director General of Revenue Department.

From September 1, 2021, foreign e-service providers and e-platforms providing online services in Thailand were required to register for 7% VAT if their annual income exceeded 1.8 million baht.

Mr Ekniti said suppliers paid more than 2 billion baht in VAT, of which 686 million baht was paid in September 2021, 646 million baht in October and 590 million baht in November. The ministry is in the process of calculating the amount of payments for December.

Considering the high number of foreign online platform providers registering for VAT in Thailand, Ekniti said such payments are expected to total around 10 billion baht this year.

Previously, the department expected only 100 suppliers to register for VAT in 2021, with total VAT payments of around 5 billion baht per year.

According to the Ministry of Finance, electronic services subject to this legislation include e-commerce platforms, online advertising, online accommodation booking, online music and movie streaming, online games and applications.

The law aims to foster a level playing field between Thai operators and foreign electronic service companies providing services in Thailand, with the latter now required to pay VAT in accordance with the law.

Thailand’s enforcement of the Electronic Services Tax Act follows in the footsteps of more than 60 countries around the world that collect VAT from foreign electronic service operators who derive revenue from their territories.

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