What you need to know about Thailand's new Tax Requirements for Sales of Digital Products and Services -
The federal government recently issued guidelines that require companies that offer digital services -- namely, selecting electronic goods and servicesto be VAT registered in the event that they meet certain standards and conditions.
In the next part In the following section, we'll provide you with facts you'll need about Thailand's tax laws on sales of digital goods, as well as services.
- Foreign e-services provider requirements
- What are Thailand's rates of VAT on E-Services?
- Do I need to register for VAT within Thailand?
- What's the most effective method to register for VAT registration in Thailand
- The VAT list penalties that could be levied
New requirements that apply to foreign businesses offering electronic services.
On September 1, 2021 Thailand has extended the VAT law to encompass the selling of digital items and services (e-services) that are provided by businesses that are not resident to Thai clients. Before the type of business did not have the requirement to register to VAT.
In order to monitor compliance with the tax regime. To ensure that the tax regime is in compliance. the new tax regulations It is the Thai Revenue Department is maintaining an publicly accessible database of companies who have not been residents of Thailand but that are VAT registered.
Thailand has recently released a manual which provides details about a range of areas of compliance such as the VAT submission and payment details, validation of VAT numbers, and the use of Foreign Exchange (FX) and other sources.
There are some phrases in the manual which deserve to be defined.
- Electronic services:Includes non-physical products delivered via the internet or any other electronic network in an automated manner that cannot be guaranteed without IT (i.e. online games, web-based or mobile applications, and software).
- Digital Platforms Every market technique is a method or process that digital service providers use to provide services to clients. These platforms are facilitators for the service provider and their customers and assist in facilitating the transactions between these two parties.
- Easy VAT E-Service (SVE):The electronic system Thai's Revenue Department offers service providers and platforms online that permit you to sign up as VAT tax payers, submit Tax returns for VAT and paying VAT, and apply for VAT refund electronically.
Find out more information on Thailand's TVA rates for Electronic Services in the Official Guide.
What rate is Thailand's VAT applicable to Electronic Services?
| Rate | Type | Liste of Goods and Services |
|---|---|---|
| 7% | Standard | Online games game, video, digital advertisements, mobile applications Pre-recorded online courses, and commissions paid to intermediary companies Digital images, financial information Web hosting search engines streaming on demand catalogs and electronic market places |
| 0% | Exempt | Live teaching, Ebooks, transfers, payments facilitation service and telecommunications solutions that require human interaction Electronic vouchers |
To calculate your VAT amount to calculate your VAT value, simply multiply the amount of the service Thai Baht with 7 per cent of your rate of VAT.
Find out more about the rate of VAT in Thailand to use the Electronic Service (VES) via the official Thailand Revenue Department site.
Do I have to join to be VAT registered in Thailand?
If you supply electronic services for non-VAT, or VAT registered individuals, for instance consumers or small non-registered companies You'll have to register by VAT if the value of your tax-deductible service exceeds 1.8 million Thai Baht (approximately $55,800 USD) within a calendar year.
companies that aren't residents of Thailand must sign up and make VAT payment in Thailand in the event they satisfy the following conditions:
- Provide e-services, receive payments and other services on an online platform that is accessible from overseas.
- The web-based service is accessed in Thailand for customers who do not already have an VAT registration.
- Revenue from e-services exceeds 1.8 million baht in the accounting period.
Check out the Key Elements section in the manual for more information.
How do I register with VAT in Thailand
sellers do not have to think about registration for VAT and the process of taking, calculating or submitting tax return for Thailand because we take care of the process for them.
If you're not using it for tax management, we'd suggest that you read the guidelines offered by Thailand's Revenue Department. This is a list of details that can help provide you with the proper direction:
- Electronic service and electronic providers in various countries, as well as platforms are able to register VAT online by using the SVE on the Revenue Department's website.
- The VAT registration form must be submitted separately by each firm. If you manage more than one branch or subsidiary, each company that is capable of meeting the legal requirements for registering VAT in a separate manner must submit the form making use of SVE.
To learn more about VAT registration, take a look at the entire VAT registration guide. Electronic Services (VES) Registration Guide.
A possible list of tax penalties for VAT
Here is a list of consequences your company might be liable to when you don't adhere to tax regulations for VAT in Thailand.
Civil Penalties
| Infractions | Fines/ Penalties |
|---|---|
| Businesses that do not VAT-registered | The penalty is twice the amount due each tax month in the event of inability to comply with the law or 1,000 Baht per month, or the amount that is greater. |
| In the event that the VAT return being submitted in the late hours, it could create problems for taxpayers. The return | The tax rate is double as high. To be paid during a tax month |
| Tax returns not properly filled out could affect the amount of tax due to be refunded. | The amount of tax to be levied is determined by the amount of tax |
Criminal Penalties
| Offenders | Penalties Fines |
|---|---|
| The failure to declare VAT, and the conduct of business without VAT registration | An indefinite sentence which is not longer than one month, or a fine of not more than five thousand Baht or both. |
| The tax returns of VAT, which are not submitted | An amount of fine not more than 2 000 Baht |
| Failure to report VAT in accordance with the requirements laid down by Director General | An imprisonment term not greater than 6 months or a fine which isn't more than 10,000 Baht or both. |
| Try to reduce VAT, or avoid VAT in any other way by issuing a tax bill or debit note without the authorization | A sentence of three months to seven years, and a penalty of up to 2 000 Baht or all the way to 200000 Baht |
Tax liability may be claimed on
Our tax experts work around the clock to be up to date regarding changes to tax laws in addition to working with experts from the outside to ensure that your company is safe and compliant.
- Offloads your tax liabilities
- Tax calculation is automatically done at the time you pay.
- Taxes are paid globally on your behalf.
- Controls the entire tax compliance process
- Assistance with tax-exempted orders
This article was originally posted here
Article was first seen on here