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Thailand clarifies scope of digital services VAT rules

Thailand has updated its digital services VAT guidance, clarifying the scope of digital services. 

Under recently implemented regulations, non-resident companies providing online services to customers in Thailand are liable for 7% VAT. Note that the digital services VAT registration threshold is 1.8 million Baht per year.

Here are some of the online activities that meet the definition of ‘electronic services’ under the regulations. 

Online marketplaces

According to the guidance, if you provide a service which facilitates the sale of products through an online marketplace, and charges a fee for doing so, then you are providing an electronic service. The marketplace must in such a case therefore collect and account for VAT.

Online travel agencies

If an online travel agency delivers services in such a way “which renders their service essentially automated and impossible to ensure in the absence of information technology” then they are deemed an applicable electronic service. 

Consult a VAT specialist if you provide online travel services to customers in Thailand and want more detailed clarification.

E-vouchers sold online

Selling e-vouchers (for use in a store) through an online platform is not an electronic service. 

Selling ebooks online

The category ‘digital service’ applies to selling or renting ebooks through a digital platform.  However, such items are exempt from VAT.

Electronic payment services

‘Digital services’ covers online payment services supplied over the internet, which depend on information technology.

Please note that if you supply services to customers in Thailand and want specific advice based on the latest regulations, you should consult a e-commerce and digital services VAT specialist directly.

Digital Services VAT in Thailand

A large number of countries have already adopted a system of VAT on digital services. Moreover, that number is expected to grow. Authorities in Thailand implemented Digital Services VAT aims to create a level playing field for Thai companies and overseas businesses providing online services to Thai customers. They also aim to enhance revenue collection.

A seamless Digital VAT solution 

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