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Thailand digital VAT revenues beat forecast

Thailand’s digital services VAT has surpassed revenue estimates. As of 1 September 2021, non-resident companies that supply digital services to customers in Thailand are liable for VAT.  The Revenue Department previously said it expected around 100 nonresident suppliers to register for VAT in 2021.  However, according to the latest reports, 120 suppliers have registered. Revenue also exceeded forecasts.

Under the law, suppliers must register if their annual turnover exceeds the VAT threshold of TBH 1.8 million.

Which digital services are subject to VAT in Thailand?

A range of online supplies meet the definition of electronic services under Thailand’s regulations. Regulators recently clarified the scope of electronic services under the law. 

For example, online travel services that rely on digital automation are subject to digital services VAT. On the other hand, an online business that sells e-vouchers for use in a store does not produce a digital service under the regulations. 

If you supply online services to customers in Thailand, it may be advisable to consult a VAT expert for full clarity on your VAT obligations. 

Untapped potential for digital services revenue collection

Thailand’s successful digital VAT revenue drive will be no surprise to the authors of “Digitalization and Taxation in Asia”.

According to the report, produced by the IMF, digital services VAT presents a considerable revenue opportunity in Asia. The authors claim that digital services VAT would mean “an additional $166 million in Bangladesh, $4.8 billion in India, $1.1 billion in Indonesia, $365 million in the Philippines, and $264 million in Vietnam”.

The internet is now central to the economy. We should expect more countries to adapt their VAT rules to meet the new digital reality.

More and more, if you sell services online – from gaming to streaming to yoga classes to wine appreciation courses – there’s a good chance you have to pay VAT. In fact, there’s a really good chance you’ll soon have VAT obligations all over the world. But don’t worry, we’re here to make global compliance easy.

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