WEB PBS JAN 18

BUSINESS SUPPLEMENT
TAXES TO BE LEVIED ON
E-BUSINESS FROM THIS YEAR
The director-general of the Revenue
Department recently announced
that the government is
set to introduce a draft bill to the
parliament which will introduce
an e-business tax, which will be a
levy on any transaction that takes
place inside Thailand, no matter
where the e-commerce operator
happens to be located.
The levy is expected to be set at
a maximum of 15 percent but, as
the director-general noted, the
rate will vary depending on the
nature of the business.
The government has recognised
that people are purchasing goods
online in increasing numbers and
much of this is coming from overseas
operators who do not have
a physical presence in Thailand.
Concomitantly, the Finance Ministry
has noted a drop in revenue
from traditional sellers and it is
therefore seeking ways to redress
the imbalance.
The Revenue Department said
the draft bill will put the onus on
financial institutions, which currently
act as the intermediaries
for money transfers, to withhold
tax for online purchases and advertising
fees on social media
networks, sending the collections
to the department.
The idea is to create a more level
playing field between the online
world and traditional bricks and
mortar operations. As the director-general
pointed out, there are
several online businesses which
earn revenue out of customers
living in Thailand, but they are not
subject to tax.
The Revenue Department estimates
the value of online purchases
to be currently in the
trillions of baht with online advertising
estimated to be worth about
10 billion baht.
The draft bill has been designed
to supersede the double-tax
agreement, which states that
those who are liable for tax payments
in any country must have
a permanent physical presence in
those locations.
The draft bill on e-business tax
will also annul the current valueadded
tax (VAT) exemption for
online shopping on goods worth
less than 1,500 baht and were
purchased from foreign vendors
outside of Thailand. The plan appears
to be aimed at making all
online purchases subject to tax.
At the present time only goods
purchased outside Thailand to a
value of 1,500 baht or more are
subject to the seven percent VAT.
It is probably no surprise that
online shopping for goods worth
1,500 baht or less from overseas
vendors has become a popular
activity and the Revenue Department
has recognised that this is
unfair to local bricks and mortar
businesses which must charge
VAT on all products, regardless of
the sale price.
The e-business tax will simply
redress this imbalance.
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